Marvellous electric skateboards; Renault’s late CO₂ credit gambit; and timid Tesla. Please enjoy our auto industry and mobility briefing for 5^th October to 11^th October 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Wannabe — Electric axle maker REE showed off three new skateboards for different all-electric vehicles. If you think that sounds unremarkable, I agree. Many companies have recently revealed similar designs, often raising hundreds of million based on these displays of engineering prowess. But if a small, obviously talented but small, team with relatively little funding can produce such products then either: they aren’t as complete as they seem (my vote) or this is all actually very easy and there is no massive competitive advantage. How many of these electric skateboards have made it into production underpinning a variety of vehicles again? If you were going to say Tesla, then one further question… why don’t Tesla display rolling chassis of the Model 3 in their showrooms like they used to with the Model S?
• Independent Women Part 1 — Renault volunteered to share European CO₂ compliance with interested competitors, not for free of course (the link takes you to the document filed to declare this). It’s a bit late in 2020 to be organising such a deal, but perhaps that is because everyone they’ve asked informally (e.g. Nissan, Mitsubishi and Daimler) is comfortable with where they will end up. Will anyone take Renault up on their offer?
• Push It — Tesla will put its new, larger, batteries into production in the Berlin plant first and won’t install them in models in Shanghai and California until they’ve proved there are no quality problems. This doesn’t sound like the Tesla I know. Should we expect to see a similarly cautious rollout of all new technologies from now on? Whatever happened to just trying it out and seeing what happened? Are Tesla getting boring in their old age?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Sold 675,680 cars in Q3 2020, up 8.6% on a year-over-year basis. (BMW)
• BMW’s CFO says the transition to electric powertrain is accelerating and indicated that the company is interested in deeper collaboration in developing and building internal combustion engines. (Handelsblatt)

Daimler ^(history)

• Sold 721,608 light vehicles in Q3 2020, up 2.4% on a year-over-year basis. (Daimler)
• Presented details on an updated strategy. The core of the plan is cutting unprofitable models, regaining pricing power for the Mercedes-Benz brand and growing volume through sub-brands AMG, G (class) and Maybach. Smart (in future a joint venture with Geely) was not mentioned at all during the presentation. The Maybach brand aims to double sales, partly through growth in electric offerings. There was a subtle difference in nomenclature between AMG “high performance electrification” (probably code for powerful plug in hybrids) and G-Class and Maybach “go(ing) electric”. (Daimler)
• Alongside new portfolio priorities, the Mercedes brand expects to increase profits from aftersales, both through improved loyalty to the official dealer network (who use official spare parts), something that normally drops significantly at the end of the warranty period; and sales of digital products (which are increasingly becoming a service that customers must pay for every few years). The hope is that service and parts revenues will grow 80% by 2025 and digital services will bring €1 billion of EBIT by 2025, although Daimler was light on the specific actions that will lead to such spectacular growth. (Daimler)
• On electric vehicles, Daimler says that the downward trend in battery costs has made the company realise that the transition to zero emissions powertrain will be quicker than expected (although strangely the mid-2025 cost data point is the same as Daimler presented at Paris in 2016). Daimler says the initial products will be solidly profitable, which from 2025, new products will have “strong contribution margins” (a slightly odd emphasis since contribution margin is not the same as bottom line profitability). The number of all-electric vehicles promised by 2025, more than 10, seems like a slight retrograde step from an earlier level of 10 by 2022, but it seems the new aspiration does not include Smart. In plugin hybrids, the company hopes to outpace competitors by offering substantially higher battery capacities, and longer range, than rivals who are clustering at the level need for just over 50km of zero emissions driving. After launch of the initial range of electric cars, Daimler will start building vehicles on the MMA platform, designed around an “Electric First” philosophy which will offer a range of all-electric and hybrid powertrains. Daimler also made GM-like claims about leadership in electric motor design and the value of in-house battery expertise. (Daimler)
• Daimler says that it will have a proprietary OS, MB.OS, but presented a narrower view of the scope than some rivals. The vision is to serve primarily as an integrator of third party work, with very little of the basic program being the sole preserve of Daimler’s in-house engineering teams. Instead Daimler will set standards for both software and hardware that ensure interoperability, and concentrate on programming customer-facing features. (Daimler)
• Without revealing much on specifics, Daimler committed to shrinking fixed costs by 20% compared to 2019 through reduced spending and headcount. Capital spending and R&D are forecast to fall by 20%, with Daimler expecting portfolio reduction, and their approach to electrification, to help trim costs. Variable costs are also set to reduce by 1% each year, but since this figure excludes the product cost impact of transitioning to electric vehicles, the number might actually rise. Daimler is now planning for three 2025 scenarios. In the worst case, implied margin targets are the classic 5% – 7.5% industry promise. In the best case they are “double digit” (implying 10% – 12%). (Daimler)
• CEO Källenius flatly denied suggestions that he was interested in buying Aston Martin. (Autocar)
• Settled a legal action brought by Sharp over use of its patent portfolio. (Reuters)

Ford ^(history)

• Told US office employees to expect to work from home until June 2021. (Detroit News)

Geely (includes Volvo) ^(history)

• Geely and Lynk&Co sold 345,026 cars in Q3 2020, up 13% on a year over year basis. The Lynk&Co brand alone rose 54% from the prior year. (Geely)

General Motors ^(history)

• Invested in holographic head-up display specialist Envisics. (TechCrunch)
• The forthcoming all-electric Hummer will use Epic’s Unreal Engine — hitherto a piece of software used in dynamic computer games — in the infotainment system. (Unreal)
• Reportedly struggling to build enough Corvette’s to fulfil demand. GM has apparently increased output at the factory but is now finding that suppliers can’t keep up. (Auto Evolution)

Honda ^(history)

• Unveiled a facelift for the Ridgeline pickup truck. (Honda)

Hyundai / Kia ^(history)

• Hyundai sold 1.01 million vehicles in Q3 2020, down (8)% on prior year. (Hyundai)
• Hyundai Mobis invested in holographic head-up display specialist Envisics. (Hyundai Mobis)
• Recalling around 25,500 all-electric Kona cars because defective batteries could catch fire. (Reuters)

Nissan and Mitsubishi ^(history)

• Nissan’s CEO says he is open to the idea of supplying competitors with electric vehicle technology and believes that the transition to electric powertrain will lead to an industry restructuring. (Nikkei)

PSA ^(history)

• Vauxhall’s boss says the area of the UK market with the greatest unstimulated demand for fully electric vehicles is in the 1T – 2T van segment. (Autocar)
• Unveiled a facelift for the Opel / Vauxhall Crossland. (Opel)

Renault ^(history)

• Registered an interest in forming a pool for European CO₂ sharing in 2020. The move indicates that Renault has beaten its 2020 targets and is in a position to offer relief to other car makers — for a price. As yet, no one seems to have taken LEVC up on their similar (although likely smaller) offer so demand is unclear. (EU)
  • Significance: Since Renault has gone public with an offer to form a pool at this late stage (a few weeks before the end of the year), it suggests that private conversations with the most likely partners — Nissan, Mitsubishi and Daimler — have revealed that they are on an independent path to compliance.

Tata (includes JLR) ^(history)

• Sold 202,873 vehicles in Q3 2020 (of which JLR was 91,367), down (16)% on a year-over-year basis. (Tata)

Tesla ^(history)

• According to a leaked internal email, Tesla fired an employee who sabotaged production lines, causing several hours of downtime. (Bloomberg)
• Media was abuzz with the story of a Model Y’s roof flying off the car shortly after the owner had taken delivery. Thus far it appears to be an isolated incident. (The Verge)
• CEO Musk said that the new larger, battery cell design will first be used in the new Berlin, Germany, plant with US and Chinese factories switching once quality has been demonstrated. (Reuters)
• Indonesian officials said that they held talks with Tesla about investment. The focus was seemingly more on raw materials rather than car making. (Reuters)
• Launched a charging station in partnership with European charging network operators Fastned, enabling owners of other vehicles to charge alongside Teslas (but not using exactly the same chargers). It isn’t clear whether the initative will be replicated on a larger scale. (Clean Technica)

Toyota ^(history)

• Announced a series of partnerships to put fuel cells into heavy trucks and trains. (Toyota)

VW Group ^(history)

• Bugatti has shelved plans for a second model. (Fox)
• Škoda workshop technicians have been issued with an acoustic conditioning monitoring app that compares recordings of the noises a car with problems is making to a library of known issues. (Škoda)
• VW’s local importer thinks that 90% of the cars the brand sell in Norway during 2021 will be electric. (Reuters)
• Audi’s plant in Puebla, Mexico faced accusations from local officials that utility bills and property taxes were in arrears — and threats to close it until payments were made. Audi said it was a fuss about nothing. (Reuters)

Other

• Nio sold 12,190 cars in Q3 2020, up 154% versus prior year, mainly due to full production of the ES6 and increased demand for the refreshed ES8. (Nio)
• Faraday Future is working on a plan to list via a merger with a special purpose vehicle. (Reuters)
• A third party converter is offering a LEVC hybrid taxi with an overhauled interior that features more expensive materials, hoping to capture the interest of upmarket private hire operators. With a price tag of £100,000 before taxes, there may not be many takers. (Autocar)
• Rivian has delivered its first delivery van tailored to Amazon’s requirements. (TechCrunch)

News about other companies and trends

Economic / Political News

• US light vehicle SAAR in September of 16.34 million units fell (5)% versus prior year. (Wards)
• UK passenger car registrations in September of 328,041 units, fell (4.4)% on a year-over-year basis. The industry’s trade body had been hoping sales would bounce back, and sounded glum. (SMMT)
• German passenger car registrations rose 8.4% versus prior year in September, to 265,227 units. (KBA)
• September Spanish sales of 70,729 passenger cars fell (13.5)% versus prior year. (ANFAC)
• Italian passenger car sales rose 9.5% on a year-over-year basis in September to 156,132 units. (UNRAE)
• French registrations of 168,290 passenger cars in September fell (3.0)% versus prior year, even with extra selling days. (CCFA)

Suppliers

• Grammer’s preliminary Q3 2020 revenue was €458 million, with EBIT of €6 million. (Grammer)
• Romeo Power — 20% owned by BorgWarner — is listing through a merger with a special purpose entity. The firm’s claimed special sauce is in using proprietary measurement techniques to choose best of the best battery cells and then using its own pack designs and power electronics to make the most of them. (Romeo Power)
• German government officials gave a lukewarm response to union calls for a bailout of Thyssenkrupp’s steel making unit, but didn’t rule it out. (Reuters)
  • Significance: If the German government does eventually offer support, expect domestic suppliers to be queuing around the corner, demanding similar treatment.
• Holographic head-up display developer Envisics raised $50 million from investors including Hyundai Mobis, GM and SAIC. (TechCrunch)

Driverless / Autonomy ^(history)

• Waymo is almost ready to let anyone ride in its driverless vehicles, without safety drivers. (Reuters)
• Velodyne and rival lidar developer Robosense announced a collaboration that will share them market each other’s technologies and settle a court case between the two. (Velodyne)
• Autonomous truck developer Einride unveiled a concept for a driverless vehicle it hopes to put into production in 2021. (The Verge)

Electrification ^(history)

• Inobat claims to have developed a new battery that boasts world-class energy density in “only a year”. (Inobat)
  • Significance: The challenge for battery makers is not to create huge energy density — McLaren already claim levels of 5.2 kW/kg, about twenty times the level seen in the latest batteries today — they need to be affordable enough to put in mainstream cars.
• Electric motor maker REE showed off three platforms for different sizes of vehicle, all of which use hub mounted electric motors. (REE)
  • Significance: The fact that REE can show off three different all-electric rolling chassis should give many observers pause for thought. Although each company marketing an electric “skateboard” touts their engineering prowess, the reality is that bolting four wheels onto a series of electric motors, some power electronics and a floor stuffed with batteries is a far cry from resolving the technical challenges needed to mount a variety of vehicle body styles on top of it.
• Powertrain engineering firm FEV is touting internal combustion engines as an entry level route to hydrogen as a power source. (Autocar)
  • Significance: Although hydrogen burning internal combustion engines are inefficient compared to fuel cells and still emit nitrogen oxide, their lower cost and simpler technology, plus the capability of diesel-derived after treatment, mean that they may be an attractive entry level product in countries with poor infrastructure.
• The boss of PSA’s Vauxhall brand says the area of the UK market with the greatest unstimulated demand for fully electric vehicles is in the 1T – 2T van segment. (Autocar)
• Tesla launched a charging station in partnership with European charging network operators Fastned, enabling owners of other vehicles to charge alongside Teslas (but not using exactly the same chargers). It isn’t clear whether the initative will be replicated on a larger scale. (Clean Technica)

Connectivity

• Otonomo published the results of a consumer study about future trends. Pages 28 and 29 include statistics on what the respondents think connected car data it for, and receptiveness to certain service types. (Otonomo)
• GM’s forthcoming all-electric Hummer will use Epic’s Unreal Engine — hitherto a piece of software used in dynamic computer games — in the infotainment system. (Unreal)

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Audi’s post-purchase upgrades; Ford’s inauspicious price drop; and Tesla’s lack of clarity. Please enjoy our auto industry and mobility briefing for 28^th September to 27^th 4^th October 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Beneath The Surface — Audi took a leaf out of Tesla’s book and began standardising more expensive equipment, even if the customer didn’t order it. Owners can pay a fee to enable new features, or just stick with the more basic performance. Audi will enable the new kit for a few weeks so that drivers can feel the difference, and hopefully pay up to keep it activated. Unlike Tesla which focused on batteries and driver assistance, Audi have pumped for better lights. When will we see other brands jump on the bandwagon?
• On The Run — Ford cut the price of the all-electric Mustang Mach E even though it hasn’t yet been released. The company says it has plenty of orders but wants to stay competitive. Ford won’t be the first to incorrectly appraise pricing power: the product was conceived when there were few all-electric SUVs around, so product planners decided to shoot for the upper end of the market. Imagine their surprise when, a few years later, they discover that lots of competitors have designed similar products and Tesla and VW are planning to sell theirs more cheaply. Why is forecasting the future competitor set such a consistent weakness?
• The Mask — Tesla released quarterly production and delivery numbers. Although it is the largest car maker by market capitalisation, and thrives on an image of giving in-depth technical presentations, Tesla lacks transparency. It only has two car factories and makes two models, yet sales are reported without a regional breakdown, factory output is hidden and model line sales are aggregated — far more vague than competitor reporting. Since Tesla loves to trumpet its growth, why make the detail of how it is happening so opaque?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Uber has been rumoured as a future owner of BMW and Daimler’s ride hailing joint venture. (Business Times)

Daimler ^(history)

• Uber has been rumoured as a future owner of BMW and Daimler’s ride hailing joint venture. (Business Times)
• The head of Daimler’s trucks division is retiring, to be replaced by a recruit from Scania. (Daimler)

FCA ^(history)

• Sold 507,351 vehicles in the USA during Q3, down (10)% versus a year earlier. (FCA)
• Agreed to pay a $9.5 million fine to settle an investigation by the US SEC into how FCA reported emissions compliance at the beginning of 2016. (FCA)
• PSA and FCA announced the intended membership of Stellantis, the company they will form by merging. The board will be made up of 11 members, with five nominated by each company, plus CEO-designate Tavares. (PSA)

Ferrari

• Unveiled a minor refresh to the Portofino convertible. (Ferrari)

Ford ^(history)

• Sold 551,796 vehicles in the USA during Q3 2020, down (5)% on a year-over-year basis. (Ford)
• Announced a series of executive changes, one of which sees still relatively recent CFO Stone leave the company to be replaced by long time finance insider John Lawler. CEO Farley promised that Ford will have a much more disciplined approach to capital allocation saying the firm would act “like a challenger”. He will announce a new CIO and CMO, plus backfill for Lawler as head of new businesses in due course. (Ford)
• Cut the prices of the all-electric Mustang Mach E, even though the model hasn’t yet launched. Ford said it was to remain “fully competitive”, observers were confused as to why there would be price reductions when Ford claims massive retail interest. (Detroit Free Press)
• Recalling over 700,000 vehicles in North America because the rear-view cameras sometimes blank out and about 10,600 trucks to fix steering problems. (Ford)
• Introducing mobile servicing in certain Indian cities. (Autocar)

Geely (includes Volvo) ^(history)

• Polestar is recalling 2,200 cars to fix software problems that have led to vehicles unexpectedly losing power, even when in motion. The software has to be updated manually, rather than over the air. (Reuters)
• Volvo sold 181,163 cars during Q3 2020, up 9% versus prior year. (Volvo)

General Motors ^(history)

• GM and Nikola has reportedly returned to the negotiating table to hammer out the finer points of their technology sharing and contract manufacturing deal, especially since the present value of GM’s stake in Nikola has dropped since the initial agreement was announced. (Detroit Free Press)
• Sold 665,192 vehicles in the US during Q3 2020, down about (10)% on a year-over-year basis. The firms said that dealers were doing “exceptionally well”. (GM) Sales in Canada were down (10)% YoY too. (GM)
• Investing $71 million in a transmission and casting plant. (GM)
• Buick unveiled the Electra concept car, an all-electric low-riding crossover, (GM)

Honda ^(history)

• Will withdraw from supplying F1 engines at the end of 2021. Honda says it wants to redeploy the team currently charged with building the high power motors to develop zero emission technologies instead. The firm will continue to provide engines for IndyCar. (Honda)

Hyundai / Kia ^(history)

• Giving European electric vehicle customers membership of a pan-European charging card that uses BMW and Daimler’s Change Now service. (Hyundai)

PSA ^(history)

• PSA and FCA announced the intended membership of Stellantis, the company they will form by merging. The board will be made up of 11 members, with five nominated by each company, plus CEO-designate Tavares. (PSA)

Renault ^(history)

• French unions said that, whilst they understood why Renault says it needs to cut costs, they don’t agree with the process the company is using. (Reuters)

Tesla ^(history)

• Reported Q3 2020 deliveries of 139,300 cars, up 44% on a year-over-year basis. Observers were slightly disappointed by the performance of Model 3 and Model Y because deliveries of 124,100 units were only around 35%  higher than Q4 2019’s figure of 92,500, despite the addition of a much vaunted new factory in China and the availability of the Model Y. (Tesla)
  • Significance: Tesla’s overall volume growth seems slightly lacklustre given the additions. The analysis is made problematic by Tesla’s lack of transparency. Despite being the largest car maker by market capitalisation, the company blends model line sales rather than reporting them separately, and doesn’t talk about production levels at its various sites.
• Reportedly plans to acquire battery manufacturing line expert ATW Automation. (Reuters)
• Tesla’s Autopilot received an underwhelming performance score compared with rivals in a test organised by the NCAP program – although it was rated best for avoiding accidents. (Reuters)
• Rumoured to be interested in taking a minority stake in LG’s battery unit. (Reuters)

Toyota ^(history)

• An executive said at a conference that Toyota might meet its existing target of selling 5.5 million electrified vehicles each year in 2025, five years ahead of schedule. Toyota said it wasn’t a formal target restatement. (Reuters)

VW Group ^(history)

• Scania made a further investment in battery producer Northvolt. (VW)
• Audi launched a new brand campaign, supplementing “Vorsprung durch Technik” with “future is an attitude”. (Audi)
• Agreed a deal to acquire Hella’s forward facing machine vision unit. (VW)
• Experimenting with a Tesla-like approach of building all cars (of selected model lines) in Germany and Norway with high series lighting and infotainment, and then downgrading the performance through software unless the customer pays a fee (which they can do via a mobile phone app of website). Customers can even try out the functionality for a month before committing to the purchase. (Audi)
  • Significance: Audi is betting that the additional cost to install the package on all cars, even if customers don’t activate the features, is likely outweighed by: production simplification, economies of scale, better residual values and higher take rates.
• Despite restrictions on work due to coronavirus, 317 VW Group employees got themselves fired in the first six months of 2020. It isn’t easy to do so — a group of employees who stopped production by having a barbeque in the middle of the factory got away with a warning and a fine. (VW p. 4)
• Reportedly making Lamborghini operate on an more arms-length basis with a view to a public listing. (Reuters)
• CEO Diess says the firm will make a series of important decisions about the future during 2020. (Manager Magazin)

Other

• GM and Nikola has reportedly returned to the negotiating table to hammer out the finer points of their technology sharing and contract manufacturing deal, especially since the present value of GM’s stake in Nikola has dropped since the initial agreement was announced. (Detroit Free Press) Nikola’s recently departed founder is now mired in sexual assault allegations (unrelated to his time at the firm), which he denies. (Economic Times of India) The company tried to battle the doubters by publishing a set of milestones that will see battery electric and fuel cell powered heavy trucks in production by 2023. The Badger pickup wasn’t mentioned, indicating perhaps that delivery is dependent on support from GM. (Nikola)
• Piëch recruited former Porsche boss Matthias Müller to be chairman. (Handelsblatt)
• HAAH’s bid for Ssangyong might attract support from a South Korean state bank. (Korea Times)
• Evergrande’s parent agreed a restructuring deal that avoids a massive share repurchase which was threatening its property development business. (Reuters)
• FAW has reportedly cooled its interested in truck maker Iveco. (Reuters)
• Karma will contract manufacture electric vehicles for AYRO. The plan is to build over 20,000 vehicles with a reported contract value of $300 million, suggesting that parts supply is involved too. (Karma)

News about other companies and trends

Economic / Political News

• Several premium manufacturers including BMW, Daimler and JLR found themselves unable to refute allegations that their cars use leather from cattle ranches in Paraguay that are accused of destroying the local environment, because their could only trace their supply chain back to the tannery. (Economic Times of India)
• The UK auto makers’ trade body expressed disappointment at the direction of post-Brexit trade talks with the EU saying that the industry should be “prioritised in negotiations, not traded off against other industries”. (SMMT)

Suppliers

• Mahle and Ballard will collaborate on fuel cell systems for commercial vehicles. (Mahle)
• Bodybuilder Shyft acquired smaller rival F3 MFg. (Shyft)
• Adient completed the sale of its fabrics business to an Asahi Kasei subsidiary. (Adient)
• BorgWarner completed the acquisition of Delphi. (BorgWarner)
• Grammer and Samsung’s Harman are collaborating on seat headrests that incorporate speakers. (Grammer)
• Continental’s board approved a restructuring program that will see two German plants close. (Continental)
• Electronics supplier Pateo is hoping to raise almost $150 million ahead of a public listing. (Reuters)
• VW agreed terms for the acquisition of Hella’s forward facing machine vision unit. (VW)

Dealers

• UK online used car seller Cazoo raised £240 million. (TechCrunch)
• Indian online car marketplace Droom acquired augmented reality firm Visiolab Ideas. (Autocar)

Ride-Hailing, Car Sharing & Rental ^(history)

• Via acquired fleet management software developer Fleetonomy. (Via)
• Uber is rumoured to be a future owner of BMW and Daimler’s ride hailing joint venture. (Business Times)
• Uber was allowed to renew its licence in London after a court ruled against a decision by the city’s transport regulator. It was then rival service Ola’s turn, as the regulator identified the company an operating licence for similar, safety, reasons. Ola is likely to appeal. (BBC)
• A private equity firm invested $500 million in Uber’s freight division. (Reuters)
• Ride hailing firm Bykea raised $13 million. (Deal Street Asia)
• South Korean firm Humax is launching a white label fleet mobility service incorporating fleet management, servicing and charging. (Humax)

Driverless / Autonomy ^(history)

• Autonomous delivery vehicle developer Einride raised €8.5 million. (EU Startups)

Electrification ^(history)

• In-wheel motor developer Elaphe Propulsion Technologies raised €4 million. (Elaphe)
• Total is buying Bollore’s charging network in London. (Reuters)
• Battery maker SVOLT, a spin-off from Great Wall, is hoping to raise up to $440 million. (Reuters)
• Mahle and Ballard will collaborate on fuel cell systems for commercial vehicles. (Mahle)
• Northvolt raised $600 million. (PV Magazine)

Other

• Electric scooter rental firm Neuron Mobility raised $12 million. (Deal Street Asia)

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VW in Tesla’s rear view mirror; Amazon makes things interesting; and no child left behind. Please enjoy our auto industry and mobility briefing for 21^st September to 27^th September 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Mama Said Knock You Out — VW is taking the fight to Tesla with the launch of the ID4 in the USA. It is locally built, priced more cheaply than the Model Y and freely available examples of the Model 3, and unlike Tesla cars nowadays, it has unlimited use of a charging network. Now the choice is down to customers. Where will they put their money?
• Can’t C Me — Amazon is creeping into the automotive market. There was already an in-car Alexa on the market, but you could accuse it of being a bit boxy. With the new dashcams and alarms, Amazon has chosen areas where competition is weak, options are expensive and feature sets are often underwhelming. What comes next?
• What About The Rest Of Us — Elon Musk says there won’t be an internal combustion industry in the long term (2:02:00 in this video). It seems like in more economically developed countries things are only going one way, but what about poorer areas? Will everyone there suddenly find the financial means to buy electric cars, solar roofs and wall mounted batteries, or will these products remain out of reach? Is he blinkered to their plight or does he have plans for a sub $10,000 car on the drawing board?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Will begin producing battery packs at the Leipzig, Germany, plant. (BMW)
• Opened a new R&D centre in Munich. Home to 4,800 engineers, it cost a cool €1 billion to build. (BMW)
• Settled a case over incorrect reporting of US retail sales by paying an $18 million fine. (Reuters)
• Invested in energy saving motor manufacturer Turntide Technologies. (FINSMES)

Daimler ^(history)

• Reportedly set to eliminate 4,000 jobs at the main plant in Stuttgart, Germany, and another 1,200 at an engine factory in Berlin, Germany.  As part of plans to meet larger headline targets. (Handelsblatt)
• Former CEO Zetsche said he was turning down the job of supervisory board chairman that he was due to inherit in 2021 because some investors had expressed a lack of confidence in him and he didn’t want to take on the role with anything less than full support. It is unclear who will take on the mantle instead. (Handelsblatt)
• CEO Källenius says demand has stabilised, but China is looking healthier than North America and Europe. (Economic Times of India)

Ferrari

• Unveiled the latest one-off car created for a fabulously wealthy client: the Omologata. (Ferrari)

Ford ^(history)

• Reached a deal with Canadian unions for a new labour contract, helped by promises from the Canadian government to provide dollops of cash. (Detroit Free Press)
• Incoming CEO Farley says China is the most advanced market for digital consumer experience. (China Daily)
• Reportedly applied for €500 million in German government loan guarantees aimed at helping companies affected by coronavirus. (Reuters)
• The Bridgend engine plant closed, for good. (BBC)

Geely (includes Volvo) ^(history)

• Volvo published the framework it intends to use to raise green bonds. (Volvo)
• Volvo’s CEO reckons that despite a rise in coronavirus cases across Europe, a recovery in the car market is well underway, with volumes similar to 2019 levels in the most recent months. (Reuters)
• Polestar is aiming for annual sales of over 50,000 units in the next two to three years. (Reuters)
• Lynk&Co unveiled the Zero Concept, previewing the brand’s first all-electric entry in 2021. (Geely)
• Geely revealed details of the SEA architecture that its brands will use for all-electric vehicles. The company says that cars from A to E segment, plus light commercial vehicles, can be accommodated by a scalable common component set. It can also be used for range extenders and the company is open to selling the design to rivals. (Geely)
• Will use MobilEye chips in driver assistance features offered across several Geely-owned brands. (Intel)

General Motors ^(history)

• GM’s deal with Nikola to build the Badger all-electric pickup truck lets GM use 80% of the zero emission credits generated by sales of the truck in the USA. (Detroit Free Press)

Honda ^(history)

• Revealed a battery electric SUV called the SUV e:concept, which the company says previews the design direction for China and may be the same car the firm intends to launch in Europe in around 2022. (Honda)

Hyundai / Kia ^(history)

• Designed a rear seat-centric concept for an interior with help from LG. The vehicle features a massive curved screen in place of a sunroof and a floor cleaning robot. (Hyundai)
• Hyundai’s South Korean unions agreed to a wage freeze. They normally strike for higher pay. (Reuters)

Nissan and Mitsubishi ^(history)

• Mitsubishi is rumoured to be planning a cull of 500 – 600 managerial jobs in Japan. (Reuters)

PSA ^(history)

• Acquired, and retired, 1.1% of PSA’s shares owned by Dongfeng, in accordance with a share purchase agreement that is part of the merger terms with FCA. PSA and Dongfeng also changed the terms of the agreement for the remaining shares to be bought (about twice the amount in this transaction) saying that if they aren’t sold to PSA by the end of 2020, they will definitely go to a third party by the end of 2022. (PSA)
• Reportedly offered to make vans for Toyota more cheaply, and increase the number it will build for the Japanese company, as a way to assuage European antitrust concerns about the impact a merger with FCA will have on the commercial vehicle market. (Reuters)

Tesla ^(history)

• Held a combined annual meeting and battery day presentation, with a limited number of attendees who sat in Tesla cars in front of a main stage and beeped horns at every comment they approved of (nearly all of them). (Tesla)
• In closing remarks for the annual meeting, CEO Musk said that the ultimate volume ambition for the Shanghai, China, plant is one million units per year (28:05) In a dig at upstart competitors, Musk said that Tesla’s contribution to the automotive industry wasn’t “making exciting prototypes” (28:50) Musk gave investors a lesson in basic economics, offering such insights as: cutting the time between order, build and delivery improves cash flow; and having factories in different regions means you can meet local demand more quickly (“build where you sell” in industry parlance) . (32:00) He believes that it is 10 or 100 times harder to design a car factory that create a prototype car. (42:00) A quick look at the relative headcount figures for manufacturing engineering and product development in established OEMs indicates that this is hyperbole.  The “true measure” of Tesla’s success will be the number of years that the firm accelerated the take up of sustainable energy by, so… impossible to measure then. (45:00) (Tesla)
• CEO Musk said that progress on Autopilot had stalled over the last two or so years because of limitations in the way information was gathered and analysed. He says that the code was rewritten and the labelling approach was changed so that it is now “3D video”, which means rather than labelling each frame from each camera, the combined camera outputs are labelled across a series of frames. Musk said that this dramatically improves performance and a private beta version (for a small subset of users to test) will be available in “a month or so”. He says the new system is “amazing” and “clearly going to work”. (39:00) (Tesla)
• Wants to halve the cost of battery packs on a per KWh basis over the next three years through optimised product and manufacturing design and use of lower cost materials, each of which brings benefits in energy density, unit cost and capital spending. The numbers quoted: a roughly 55% improvement in both energy density and piece cost are about in line with expectations based on industrywide trend improvements to date looking towards 2030. Tesla is claiming leadership through an explanation of the detail, and predicting it can achieve the improvements more quickly than most forecasts (but not all). The first method will be moving to larger cells by more than doubling the diameter from 21mm to 46mm, an approach that a few years ago Tesla was dismissive of. The new cell will be called 4680. The larger cell alone improves energy density by 16% (and reduces cost by 14%). The company now claims to have redesigned the cell in such a way that the primary drawback of slower charging for larger cells is almost entirely overcome. CEO Musk also says the batteries will be more efficient to produce. (1:08) The next stage is to reduce a step from the production process by making battery films via a process of drawing powder through a press, rather than today’s technology which requires wet coating and drying. The new process is based on developments acquired when Tesla took over Maxwell. CEO Musk admitted that the company may fail to make this work at scale because current quality levels are low. Using its knowledge of battery charging and discharging, Tesla says it can reduce the time taken to quality test the cells at the end of the line by 75%. These steps, combined by designing its own bespoke manufacturing equipment will in future give Tesla the ability to reduce the investment in a new factory by 75%, and the footprint necessary. By 2030, Tesla hopes to be able to produce 3 TWh of batteries annually (and 200 GWh by 2022) — it will continue to buy batteries from third parties. (1:28) By changing the battery materials, mainly moving to silicon rather than graphite and nickel rather than cobalt, Tesla says costs can drop whilst battery capacities increase. (1:33) Finally, by paying more attention to how the battery pack acts as a structural member (which some companies imply they are doing already), some parts of the pack and surrounding car body can be eliminated. (Tesla)
• Confirming earlier rumours, CEO Musk said he wants to launch a car with a $25,000 price point “about three years from now” (and it will be fully autonomous too). Given Tesla’s prior realisation of pricing targets, this might not be widely available in the lowest cost trim. The car does not yet have a name but in line with the exist S3XY naming convention, Ad Punctum humbly suggests it will be either the “Model !” or “Model 2”. (Tesla)
• Elon Musk doesn’t think there will be an internal combustion engine industry long term (2:02), implying that either he believes the World’s poorest countries will be able to afford high performing electric vehicle infrastructure (whether through micro grids or otherwise), or he has forgotten that poorer countries exist, or that long term could mean any point in the very distant future. (Tesla)
• Tesla’s long term goal, previewed by a question in the earnings call, was confirmed by CEO Musk as 20 million units per year. (1:55). This would put Tesla way above the current leading producers (Toyota and VW on about 10 million units each). (Tesla)
  • Significance: With Tesla’s volume per model failing to outstrip conventionally powered competitors, even in segments where it currently has the market to itself (e.g. Model S, Model 3), achieving this level of volume would require either for the brand to become far more popular than today, or for the release of a massive portfolio of vehicles.
• No sooner had the battery day presentations finished than people started to pour scorn on the claims made. Experts said that Tesla’s plan to reduce material costs by sourcing its own lithium used techniques no one had ever heard of and the company would struggle to get environmental permissions. (Reuters)

Toyota ^(history)

• Toyota Tsusho invested in software developer Aurora Labs (a different company to the similarly-named entity that is trying to build self-driving cars). (Toyota)

VW Group ^(history)

• Truck division Traton is teaming up with TuSimple to develop self-driving heavy goods vehicles, with Traton taking a minority stake in TuSimple as part of the deal. Navistar, a takeover target for Traton, is a TuSimple investor. (Traton)
• Audi might agree a joint venture for electric cars with existing partner FAW. (Reuters)
• Unveiled the production version of the ID4 all-electric SUV that will be built in Germany and the USA. (VW)
• VW sales of the ID4 in the USA are taking the right to Tesla. New owners will get unlimited charging for three years, rather than a fixed credit as Tesla offers, and VW’s Electrify America network offers faster chargers too (except the vehicle’s design means it can’t access the full power). (VW)
• Lamborghini need a new boss after their CEO was snapped up to head Formula 1. (Formula 1)
• Will pay around $6.5 million to settle claims of improper conduct by the company during the Brazilian military dictatorship. (VW)
• Porsche is experimenting with making parts of racing cars out of natural fibres. (Porsche)

Other

• Investors backed by the Chinese state are reportedly looking to take Brilliance, BMW’s partner, private. (Reuters)
• Xpeng unveiled a flying car that can carry two people at altitudes of around 25 metres. (SCMP) The company also said that with the help of local government aid it will build a 100,000 units per year factory in Guangzhou, China, that is scheduled to start up at the end of 2022. (Reuters)
• McLaren’s CEO says his company will likely have a fully electric vehicle between 2025 and 2030. (CNBC)
• The Fisker Ocean has been delayed again, this time until the end of 2022. (Fisker)
• WM Motor (formerly Weltmeister) says it has raised another $1.5 billion. (Reuters)
• Karma will name its forthcoming all-electric vehicle the GS Series, rather than sharing the Revero nameplate with the plug-in hybrid car it already makes. (Karma)

News about other companies and trends

Economic / Political News

• The UK government is reportedly soon planning to announce that sales of internal combustion engine powered vehicles will be banned by 2030, despite pleas from industry that even 2035 is too soon. (The Guardian)
• California’s governor wants to ban sales of internal combustion engined vehicles by 2035. (The Guardian)

Suppliers

• Mahle is closing two German factories making powertrain components and cutting jobs at others. (Handelsblatt)
• Toray thinks that demand for carbon fibre parts, particularly hydrogen tanks for fuel cell vehicles, is going great guns and plans to increase capacity by 50%, mainly from switching facilities away from aviation grade materials. (Nikkei)
• Bosch and Schaeffler are joining forces to produce rear wheel steering units. (Schaeffler)
• Osram and Continental are dissolving their lighting systems joint venture. (Continental)

Ride-Hailing, Car Sharing & Rental ^(history)

• Vehicle rental start-up Drivezy is reportedly looking to raise $35 million but will see its valuation drop by around one quarter. (Deal Street Asia)

Driverless / Autonomy ^(history)

• Intel’s MobilEye division will collaborate with Al Habtoor to launch a fleet of self-driving vehicles in Dubai by the end of 2022. (Al Habtoor)
• The investment firm led by Nikola’s interim chairman, Steven Girsky, is rumoured to be planning an investment in TuSimple. (TechCrunch)
• Tesla CEO Musk said that progress on Autopilot had stalled over the last two or so years because of limitations in the way information was gathered and analysed. He says that the code was rewritten and the labelling approach was changed so that it is now “3D video”, which means rather than labelling each frame from each camera, the combined camera outputs are labelled across a series of frames. Musk said that this dramatically improves performance and a private beta version (for a small subset of users to test) will be available in “a month or so”. He says the new system is “amazing” and “clearly going to work”. (39:00) (Tesla)
• VW’s truck division Traton is teaming up with TuSimple to develop self-driving heavy goods vehicles. (Traton)

Electrification ^(history)

• Charging network ChargePoint is going public via a merger with a special purpose vehicle in a $2.4 billion deal. (Economic Times of India)
• Chinese charging services provider Star Charge raised $125 million in a round co-led by charging equipment manufacturer Schneider. (Deal Street Asia)
• Solar energy specialist SPI Energy said it would launch an electric vehicle company and its share price jumped 4,000%. (Axios)
• Tesla wants to halve the cost of battery packs on a per KWh basis over the next three years through optimised product and manufacturing design and use of lower cost materials, each of which brings benefits in energy density, unit cost and capital spending. The numbers quoted: a roughly 55% improvement in both energy density and piece cost are about in line with forward looking expectations based on industrywide trend improvements to date. Tesla is claiming leadership through an explanation of the detail, and predicting it can achieve the improvements more quickly than most forecasts. (Tesla)

Connectivity

• Otonomo launched a connected car data platform that allows users to access anonymised data collected from cars all over the world. (Otonomo)
• Amazon has started making car alarms, through its Ring brand. (The Verge)
• Software developer Aurora Labs (a different company to the similarly-named entity that is trying to build self-driving cars) raised $23 million from investors including Porsche SE (already announced) and Toyota Tsusho. (FINSMES)

Other

• Advertising-funded UK bicycle rental start-up HumanForest suspended operations after an accident uncovered problems with the design of bicycle used. (TechCrunch)
• Indian on-demand refuelling service FuelBuddy raised $2.3 million. (Autocar)

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Monthly charges for driver assistance; self-driving hyperbole; and start-up shenanigans. Please enjoy our auto industry and mobility briefing for 14^th September to 20^th September 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Dollar Bill — GM says that owners of Super Cruise enabled cars will have to pay $25 per month to use the feature once the car is three years old. Although there are some examples of ongoing costs, such as mapping the road network, that underpin such charges, we are entering unchartered territory in pricing. GM has already made customers pay thousands of dollars to have the kit in their new cars (unlike Tesla which installs the sensor set at its own cost), and now it wants hundreds of dollars more each year. Is this a valid maintenance expense or gouging?
• What Do You Mean? — Human Horizons’s new car will feature “Level 4” driving capability. Don’t get too excited about a car that drives itself, it turns out it will do no more than find its own parking space in a garage. This stretches the use of SAE terminology to near breaking point. If anyone can use the shorthand to imply work leading capabilities then people will simply dismiss it. This is a shame as hitherto it has provided some degree of separation about the various stages of self-driving technology. Can we put the genie back in the box?
• Cheap Thrills — Nikola admitted, to the horror of many investors, that its early prototypes hadn’t worked properly and some of them contained bought-in parts rather than the company’s own secret sauce. Welcome to the real world. Renders, static models, early prototypes built from a parts bin — these are all tools in the armoury of companies trying to develop products and raise funding at the same time. Some of them may have good reason to and some may be covering for a lack of real progress. Can the market tell the difference?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Will fit vehicles with road condition and grip availability monitoring software from 2021 onwards. (Tactile Mobility)

Daimler ^(history)

• Daimler’s head of heavy trucks admitted that presently the brand’s only plan to accommodate spending on fuel cells, battery power and traditional diesel for the next generation of logistics vehicles was to triple the budget and that costs will only be contained through cooperation. (Handelsblatt)
• Will release an all-electric heavy truck in 2021 with a plan for a long haul version and fuel cell powered model to come around 2025. (Daimler)
• Confirmed a settlement with US authorities, and an accompanying lawsuit, over diesel emissions irregularities that will cost the company about $2.2 billion. Daimler sounded relieved that it has escaped a monitoring program of the type imposed on VW. (Daimler)

FCA ^(history)

• FCA and PSA changed the terms of their merger deal to preserve cash. FCA shareholders will get a smaller special dividend before the companies are combined but the spin-off of Faurecia will be delayed so that FCA’s owners can share in the spoils. (FCA)
• The European Investment Bank increased its loans to FCA to nearly €800 million. (EIB)

Geely (includes Volvo) ^(history)

• Volvo’s head of online sales says that 10% of new car volume coming from short term leasing schemes such as Care by Volvo is a “realistic goal within a reasonable time frame”. He sees greater online sales as inevitable given the choices available to consumers in other industries and that unless OEMs take the lead, dealers will respond to the trend, but in a fragmented way. (Autocar)
• Kandi established a subsidiary to hold its battery swapping technology, a move the company thinks will make it easier to attract investment. (Kandi)

General Motors ^(history)

• Set the ongoing price for the Super Cruise automated highway driving function at $25 per month, once a three year trial period (starting when the vehicle is new) expires. There will be a lower fee — $15 per month — if the owner already subscribes to some of GM’s other connected services. Unlike Tesla’s Autopilot activation fees, GM owners have to pay upfront for the technology and are then subject to ongoing maintenance fees. (Business Insider)
• Believes that flying cars will be a good application for batteries and electric motors. (Detroit Free Press)
• GM expects each Cadillac dealer will need to invest $200,000 to be able to sell all-electric models. The money will go into workshop equipment, chargers and training rather than new showroom space. (Detroit News)
• GM thinks that its electric motors will be a source of competitive advantage because the power electronics are integrated into the design, saving weight and space. The company has designed several modular front and rear axle set ups which can accommodate a range of motor sizes and outputs. (GM)

Hyundai / Kia ^(history)

• As part of an existing commitment to have 11 battery electric vehicles by 2025, the Kia brand said that by 2027 it will release 7 new battery vehicles by 2027 (a slightly different timeframe). The first is set to be unveiled in 2021 – Kia says the project name is CV, likely the same as the Imagine concept from 2019. (Kia)
• Released the next generation Hyundai Tucson mid-size SUV. (Hyundai)
• Selling fuel cell units for use as stationary generators. (Hyundai)

Nissan and Mitsubishi ^(history)

• Unveiled the Z Proto, a preview of the forthcoming 370Z sportscar replacement. (Nissan)
• Says that 30% of customers for the Nissan Juke choose a two tone paint scheme. (Nissan)

PSA ^(history)

• Opel disbanded yet another national sales company in favour of an importer model. This time, Hungary. (Opel)
• FCA and PSA changed the terms of their merger deal to preserve cash. FCA shareholders will get a smaller special dividend before the companies are combined but the spin-off of Faurecia will be delayed so that FCA’s owners can share in the spoils. (FCA)

Suzuki

• Unveiled the Swace, a car based on the Toyota Corolla. (Autocar)

Tata (includes JLR) ^(history)

• Revealed a minor refresh for the Jaguar F-Pace. (JLR)

Tesla ^(history)

• Reportedly interested in setting up a technical centre in Bengaluru, India according to local officials who promptly leaked details of their meeting with the firm. (Economic Times of India)

Toyota ^(history)

• In-house marketing company Delphys is being restructured to better prepare it for the rise of digital media. (Toyota)
• Toyota executives in India said the company would put market expansion plans on hold due to the high taxes imposed on vehicle sales. (Europa Press)

VW Group ^(history)

• VW has met the conditions laid out by the independent monitor appointed in the wake of the diesel scandal and has now exited the special supervision process. (VW)
• VW’s top legal executive says that whilst, due to its size, VW Group may have compliance breaches in future, a problem as large as the diesel scandal could no longer lie undetected. (FT)
• Raised €2 billion through a green bond that VW will use to develop electric vehicles. (VW)
• Rumoured to be selling the Bugatti brand to Rimac in return for a bigger share in the Croatian company. (Car)

Other

• Atlis, developers of a battery electric full size pickup truck, are hoping to raise $25 million through an offering of shares to the public with the company remaining private (a funding option available in the USA so long as the amounts aren’t too high and certain disclosure protocols are met). (Atlis)
• Evergrande announced a rights issue that will raise around $520 million. (SCMP)
• Nikola’s founder stepped down as chairman, to be replaced by Steve Girsky, one of the brains behind GM’s bankruptcy, after the company failed to completely restore investor confidence following a research note published by a short seller which said some of the brand’s early prototypes had been less capable then they seemed (the company admitted to pushing one down a hill rather than doing the work to get it running properly). (Nikola)
• HAAH, which plans to assemble vehicles in the USA using plans supplied by Chery under the Vantas brand announced that it will have a second brand, called T-GO. (HAAH)

News about other companies and trends

Economic / Political News

• A report saying that EU negotiators had rejected a UK proposal for post-Brexit trade that electric vehicles should be able to count Japanese components as local content because both the UK and EU would have separate trade deals with Japan — a mechanism known as “cumulation” — will frighten manufacturers. (FT)

Suppliers

• It was a tough week for tyre factory workers in Europe. Bridgestone announced that it will close the Béthune, France, plant (Bridgestone) and Continental could shut the Aachen, Germany, site. (Industry Europe)
• Following the announcement of another round of job cuts — around 7,000 globally — German unions complained that Mahle was not taking a 2016 labour contract, which guaranteed a future for all the firm’s German plants, seriously. (IG Metall)
• TT Electronics is acquiring magnetic products specialist Torotel. (TT Electronics)
• Garrett Motion put itself into Chapter 11 bankruptcy protection and agreed that investment firm KPS Capital should take over its assets in a $2.1 billion deal. (Garrett)
• LG Chem plans to separate its battery business, although it says there are no firm plans to have an IPO for the new unit. (LG Chem)
• Brembo wants to become a solutions provider and will invest in artificial intelligence for R&D activities, plus brand building so that its products become “cool”. (Brembo)

Dealers

• Online used vehicle trader Spotawheel raised €10 million. (TechCrunch)
• ASEAN online car marketplace iCar Asia (owner of several brands) is reportedly up for sale. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber is reportedly interested in selling some of its stake in Didi Chuxing to raise cash. (Bloomberg) The company sold its European freight operations to sennder. (Reuters) It also refinanced $500 million in debt. (Uber)

Driverless / Autonomy ^(history)

• Although Uber has escaped charges over the death of a pedestrian after they were run over by one of the company’s test vehicles, the safety driver has been charged with homicide. (BBC)
• Human Horizons will offer automated parking on the HiPhi X. The brand calls the system “Level 4 autonomous driving”. (Human Horizons)
  • Significance: The term Level 4 for self-driving on a closed course stretches the SAE definitions to breaking point and suggests that before long they will either need to be revised or completely abandoned.

Electrification ^(history)

• Electric vehicle conversion specialist XL Fleet merged with a special purpose vehicle in a deal that values the company at around $1 billion. (XL Fleet)
• Infrastructure providers Aral, Vattenfall and BP will collaborate to offer fleets a comprehensive charging service on the go, and to install wallbox chargers at their home base. (Vattenfall)

Connectivity

• INRIX and Here will offer a white label parking availability and booking service. (Here)

Other

• Proterra launched the ZX5, a new battery electric bus. (Proterra)
• Volocopter is accepting deposits for flights in the company’s air taxis. The only catches? The firm can’t say where the fight will be or when it will happen. At €300 per trip, the pricing suggests the democratisation of short term air transport is some way away. (Volocopter)

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More blockchain speed required; massive money for advanced research; and the start of a big move in online retail. Please enjoy our auto industry and mobility briefing for 7^th September to 13^th September 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Frozen — Renault is testing a blockchain-based supply chain management tool created by a group of leading suppliers. The bad news is that at the moment it can only process 500 transactions a second. Slow speeds are a criticism often levelled at the bitcoin blockchain and can sometimes be difficult to eliminate, but with a single engine line needing around 10 transactions per second, you can’t add too many before the system runs out of steam. Have the architects got their sums right?
• I Don’t Want To Miss A Thing — Toyota’s research arm announced a new $800 million fund to invest in new technologies. At a time when rivals are clamping down on spending as far as possible, Toyota is keeping its foot on the accelerator. Will the competition come to regret that they didn’t bet on the future, or will Toyota just splurge on the wrong things?
• Follow You Follow Me — Toyota announced that it is starting a Japan-wide online store for used cars, with plans for new car sales in the pipeline. Before you start yawning, consider this: Toyota holds a market share of close to 50% in Japan (with a population north of 120 million), so this single move, if well executed and well received, could be transformative and potentially the largest single bet on online retail we’ve yet seen. How seriously will Toyota apply themselves?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Chose a new agency group to lead marketing communications for Europe. Unusually, the team will not be entirely marketing specialists and will include strategy consultants from Berylls. (BMW)
• Cut the ribbon on a new battery plant in Tiexi, China, doubling local capacity. (BMW)
• Invested in 3D printing marketplace Xometry. (FINSMES)

Daimler ^(history)

• CEO Källenius says that coronavirus has made him question the firm’s competitive strengths and that he is willing to eliminate underperforming models. (FT)
• Lost a patent infringement case brought by Sharp. Daimler says it will appeal. The ultimate sanction could be a stoppage of sales in Germany but Daimler considers this unlikely since a sub-supplier is now paying a licence fee and the case is about historic royalties. (Handelsblatt)
• Collaborated with Off White, who have helped Nike to make several ranges of extraordinarily expensive trainers, to make a concept G-Class that explores future interpretations of luxury. Apparently this means abandoning materials that damp noise, vibration and harshness. (Daimler)

FCA ^(history)

• Maserati unveiled the new MC20 sports car. The design has been in development for only 2 years. (Maserati)
• In detailing the organisation for the MC20’s Italian launch, Maserati made the unbelievable claim that 7,500 meals were served, yet only 4,000 cups of coffee were drunk. (Maserati)

Ford ^(history)

• Selected by the Canadian autoworkers’ union as the lead company in pattern bargaining. (Detroit News)
• Said in an investor presentation that logging data from connected cars was helping to choose what content to delete from cars to make them cheaper to build. Ford gave a specific example of showing how often owners locked the car using the rear doors — where it found the answer varied by vehicle line. (Ford P10)
• The forthcoming Mustang Mach E will identify drivers based on the signature of their key fob and mobile phone, so that individual settings are applied before they even settle in. The car’s infotainment system will learn all sorts of regular habits, such as regular routes and phone calls, assuming owners don’t find it creepily effective. (Ford)

General Motors ^(history)

• Took an 11% stake in hydrogen electric truck company Nikola and agreed to supply battery and fuel cell technology, plus engineer and build the already announced Nikola Badger pick-up truck. GM received the equity, worth around $2 billion at current levels for free in return for unspecified in kind consideration (e.g. the technology transfer). The forecast value of the supply contracts is another $2 billion. Since the Badger was announced in 2020 and is planned to launch in 2022, GM’s engineering team will have to get a move on, even if it runs of the forthcoming all-electric platform that will be used for the new Hummer. (GM)
• Sold the Lang Lang, Australia, test track to VinFast. (Economic Times of India)
• Says that using a next generation battery management system from supplier Analog Devices will reduce wiring within the battery pack by up to 90%, reducing weight, and increasing pack density. (GM)
• Announced a fleet supply deal with Uber that will offer substantial discounts (the same level that employees receive) to Uber drivers if they buy a GM electric car. (GM)

Hyundai / Kia ^(history)

• Hyundai’s marketing department need to start saying potential names out loud before committing to them. The brand’s latest camper van conversion is called the “Porest” — seemingly a clever combination of the donor vehicle (Porter) and the idea of leisure (rest). (Hyundai)

Nissan and Mitsubishi ^(history)

• Nissan’s COO says the tipping point for electrification will be when battery cost falls below $95 / kWh, but that Europe is already in the midst of a change despite prices still being above that level. (Autocar)
• The Japanese government has reportedly provided massive loan guarantees for banks giving Nissan credit, and would be on the hook for around $1.2 billion if the company failed. (FT)
• Nissan plans to raise $8 billion is US dollar bonds after Japanese bond issues raised less than hoped. (Nikkei)
• Has now produced half a million Nissan Leaf all-electric car (over two generations). (Nissan)
• Nissan’s COO confirmed that the next generation Micra will be developed and built by Renault. (Reuters)

PSA ^(history)

• Opel continued its clear out of national sales companies in smaller European markets, announcing an importer had been chosen for Serbia, North Macedonia, Montenegro, Kosovo and Albania. (Opel)

Renault ^(history)

• In a memo to staff, new CEO de Meo said that the company would probably need to increase cost saving targets for the restructuring plan announced before he started to escape the “red zone”. He called the cashflow projections he has seen “alarming” and suggested that there was scope for 25% price increases in mid-size cars, whilst cutting the portfolio by around one third. (Reuters)
• Renault and Nissan are hoping to bag a sizeable slice of Uber’s demand for electric vehicles in the near term, signing a fleet deal with the ride hailing operator to sell vehicles to drivers. (Renault) A separate release by GM about a similar scheme in the USA indicates that drivers will be entitled to heavy discounts. (GM)
• Testing a blockchain-based parts tracking system called XCEED sponsored by several major suppliers. Methods to increase the current capacity of 500 transactions per second must be found if the system is to be used across the supply base. (Renault)
• Dacia unveiled new Sandero and Logan models. (Dacia)

Suzuki

• Slightly increased its shareholding in Maruti Suzuki, from 56.28% to 56.37%. (Economic Times of India)

Tata (includes JLR) ^(history)

• Reportedly exploring the sale of stakes in Tata Technologies and a construction machinery joint venture with Hitachi to raise cash. (Live Mint)

Tesla ^(history)

• Once Tesla’s Chinese plant is running at full steam, the plan is reportedly to export cars to Europe and Asian markets. (Reuters)

Toyota ^(history)

• Toyota’s advanced research institute — to be rebranded as Woven — is launching a venture fund with an $800 million war chest. (Toyota)
• Announced an online store selling used cars across Japan. The company hopes to expand the offering into new cars in future. (Toyota)

VW Group ^(history)

• The Traton truck unit increased its takeover bid for Navistar. (Navistar)
• The head of Škoda’s Czech organised labour complained that the company plans to move too much production out of the Czech Republic, calling it a campaign against the brand. His comments could bring him into conflict with VW’s union leader in Germany who has applauded such moves in the past. (Reuters)
• Highlighted the challenges of procuring ethically sourced batteries by revealing that 134 suppliers and 18 mines are used to produce component parts for VW Group’s batteries. (VW)
  • Significance: With VW forecasting battery electric vehicle production rising by an order of magnitude in the next few years, keeping tabs on suppliers threatens to become a substantial bureaucratic overhead.
• Former CEO Winterkorn will face trial in Germany, charged with fraud over the diesel emissions scandal. (Reuters)
• Showed off the station wagon and rugged estate versions of the new Golf. (VW)

Other

• Lucid revealed the production version of the Air, with the brand’s CEO saying it was aiming squarely at the Mercedes S-Class (which sold 71,300 units globally in 2019 including 12,500 in the USA). The car boasts a massive 113 kWh battery (good for almost 520 miles) and a price tag well north of $100,000. Lucid says cheaper versions with lower range will become available post launch. (Lucid) Executives announced at the launch event that the second product – already confirmed as an SUV – will be called Gravity. (TechCrunch) The company also intends to launch a range of stationary storage products. (Economic Times of India)
• McLaren is contemplating a sale and lease back of its headquarters in a bid to raise cash, despite recent statements from the Formula 1 team that there was no longer a problem with liquidity. (The Guardian)
• VinFast acquired GM’s Lang Lang, Australia, test track. (Economic Times of India) There was also a new limited edition SUV announced: The President, which has a $164,000 price tag and of which only 500 will be built. (Nikkei) The brand’s parent denied that it was interested in selling off some of the non-automotive businesses in its portfolio to raise money. (Reuters)
• After the high of announcing a tie-up with GM, Nikola had to vehemently deny claims made in a research note that the company’s technology was sub-par. (Nikola)

News about other companies and trends

Economic / Political News

• Under the recently-signed Formula 1 commercial contract, new teams will have to pay $200 million to enter the championship, with the money going to existing teams. Good news for the likes of Daimler, Ferrari, McLaren and Renault should anyone have a big enough chequebook. (Autosport)

Suppliers

• Schaeffler announced a new restructuring plan aimed at saving €250 million – €300 million annually. The firm is looking to cut around 5% of the workforce. (Schaeffler)
• The CEO of German steel supplier Salzgitter is not interested in a merger with Thyssenkrupp’s ailing steelmaking division. (Reuters)
• Kongsberg’s CEO stepped down. The firm appointed interim co-CEOs whilst a replacement is found. (Kongsberg)
• Battery supplier Envision is reportedly hunting around for a new site in France. (Reuters)
• KCC Glass is acquiring all of the Korea Autoglass joint venture it operates with AGC. (Yonhap)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber’s target is for 100% of trips to be in all-electric vehicles by 2040, with an earlier target of 2030 for US, Canada and Europe. The company is creating an $800 million fund to help drivers buy new cars. (Uber) The company is negotiating large discount programs with OEMs such as GM, Nissan and Renault.
• Indian all-electric ride hailing business BluSmart Mobility raised $7 million. (Live Mint)
• Rental operator Europcar is in talks with lenders over a debt restructuring. (Auto Rental News)

Driverless / Autonomy ^(history)

• Lidar developer Ouster raised $42 million. (Ouster)
• A Cruise blog post gave an overview of the complexity involved with machine learning for self-driving vehicles – and demonstrated that the group have no intention of writing detailed rules for coping with extreme manoeuvres, seeing the task as “impossible”. (Cruise)
• Waymo published a blog explaining how it combines real world data with scenarios for rare problems it stages at a test track called Castle. (Waymo)
• ZF has teamed up with Aeva to bring the latter’s lidar technology into production. It is unclear how this affects ZF’s existing relationship with Ibeo, which it part-owns (the rumour is that the stake is up for sale). (Aeva)

Electrification ^(history)

• A study of British car buyers found half of those asked will NEVER buy an electric car because of a shortage of charging points. The disconnect between a transient number of charging points and a supposedly absolute level of disinterest didn’t stop headline writers from seizing on the news. (The Telegraph)
• Charging provider Wallbox acquired Spanish firm Electromaps. (Europa Press)
• GM says that using a next generation battery management system from supplier Analog Devices will reduce wiring within the battery pack by up to 90%, reducing weight, and increasing pack density. (GM)

Connectivity

• Nvidia is acquiring chip designer ARM from SoftBank in a $40 billion deal. (BBC)
• Parking app SpotHero is acquiring Canadian rival Rover Parking. (FINSMES)

Other

• AYLI says that it has letters of intent from a buyer who wants lots of the electric motorcycles the company has under development. (AYLI)
• Ad-funded bicycle rental firm HumanForest raised £1.8 million. (TechCrunch)

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Saintly limited series cars; Renault’s massive punt on Alpine; and two powerhouses get together. Please enjoy our auto industry and mobility briefing for 31^st August to 6^th September 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Daydreamer — Alongside E-Types, Bentley Blowers and various Aston Martins, you can now buy a continuation Volvo P1800 courtesy of Geely’s in-house racing arm. The $500,000 price tag (including some fettling of the performance) makes it cheap by comparison to some of those and makes me think about the possibilities for others… if the P1800 is fair game for a reissue, why not the Ford Escort Mexico? Does this Volvo bring continuation editions into the mainstream or is it a step too far?
• Chasing Pavements — Alpine is going to become one of the three key brands at Renault and will get a re-branded Formula 1 team to help sell itself to the masses. Given the failures of Jaguar, Alfa Romeo et al (not to mention BMW and Toyota) to make an impression. With sums of money that rival vehicle program investment being spent, how is the nominal cost switching the branding to Alpine rather than leaving it as Renault justified in these times of exacting capital allocation?
• Someone Like You — GM and Honda are getting together to develop and product vehicles and powertrains in North America. It makes a great deal of sense: to compete in North America, Honda has to develop big vehicles that don’t sell well elsewhere whilst GM can’t build smaller vehicles because of the measly returns and puny volumes. How will Ford and FCA react?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Unveiled the new Rolls-Royce Ghost. Plutocrats’ chauffeurs will be relieved to know that the days of rushing round to the back of the car are over — the Ghost is equipped with power opening doors. (Rolls-Royce)
• Rolls-Royce’s CEO says that the brand is set to be profitable in 2020, thanks to massive pricing power, and will set up a second shift to deal with the anticipated demand for Ghost. He isn’t sure yet whether the new limousine or the Cullinan SUV will emerge as the brand’s biggest seller. (Automotive News)

Daimler ^(history)

• Unveiled the new S-Class. The car comes with all the usual mod-cons, plus new occupant monitoring sensors which enable gesture recognition and automation of some functions by pre-empting the need based on the movement of the driver. Mercedes have also fitted an optional rear steering system for enhanced manoeuvrability in congested city centres. (Daimler) Daimler executives told assembled journalists that the target letter for the S-Class’s specification was 689 pages long. (Reuters)
• Daimler will not be investing in additional capacity in Germany, preferring to build where it sells (e.g. more production in China). CEO Källenius admitted that the restructuring plans were now intended to be deeper than when they were first announced (pre-coronavirus). (FT)
• There is likely to be a Maybach version of the all-electric EQS limousine, with Daimler executives suggesting that there were “opportunities”, almost certainly code for the program having been already approved. (Bloomberg)
• Daimler’s boss remains open minded about an expanded future cooperation with Aston Martin but says that he can’t comment on any initiatives at present. (Top Gear)
• Issued a €1 billion green bond that will fund development of low CO₂ transport and sustainability measures. Daimler will pay just 0.75% interest. (Daimler)
• Setting up a new test site in Albuquerque, USA to develop self-driving trucks with the recently acquired Torc Robotics team. (Daimler)
• Daimler says that the factory building the new S-Class will be 25% more efficient than when the previous generation was built. (Reuters)

FCA ^(history)

• Unveiled the three-row Jeep Grand Wagoneer, a vehicle that is intended to push the brand upmarket, as well as increase volumes. There will also be a shortened version, called simply Wagoneer, that is yet to be revealed. The vehicles are set to be launched in 2021. (FCA) The head of the Jeep brand sees the vehicle’s competitors as the Range Rover and Cadillac Escalade. (Reuters)

Ferrari

• Production of the GTC4Lusso — the closest thing Ferrari had to a family car — has ended. (Motor1)

Ford ^(history)

• Confirming earlier rumours, Ford announced plans for an early retirement program, aiming to get 1,400 North American employees off the payroll. (Detroit Free Press)

Geely (includes Volvo) ^(history)

• Cyan Racing, which traditionally handles motorsport for Volvo and Geely in Europe, announced a continuation edition of the 1960’s Volvo P1800 coupe. Unlike recent efforts from Bentley and Aston Martin, the car is substantially upgraded versus the original, boasting higher power, lower weight and a steeper price tag — a cool half million dollars. (Autocar)
• Volvo is acquiring a Swedish dealer group with the intention of rolling out a set of IT tools and processes that allow for seamless transactions online and at the dealership, so that customers won’t have to restart orders just because they choose to drop into a dealership, or vice versa. Volvo’s plan is to hone to system in Sweden and then deploy in other markets around the world. (Volvo)

General Motors ^(history)

• GM and Honda intend to create a partnership in North America that will see vehicles and powertrains shared, with joint purchasing efforts that seek to leverage the scale of the two companies. (GM)
  • Significance: Although the companies don’t mention the products involved, the deal could mean GM can still participate in car and minivan / MPV segments that it has recently abandoned on the basis of cost efficiency and offset some of the technologies it can no longer cost effectively develop in-house after selling Opel.

Honda ^(history)

• GM and Honda intend to create a partnership in North America that will see vehicles and powertrains shared, with joint purchasing efforts that seek to leverage the scale of the two companies. (GM)

Nissan and Mitsubishi ^(history)

• Nissan says it has developed a new method of working with carbon fibre to produce car parts. Although the company is cagey on the details, it claims that development time has halved and cycle time can be reduced by 80%, indicating that the facility and tooling costs can be substantially reduced, although not to the point where the parts are cheaper than aluminium or steel (although extreme performance demands could demand carbon fibre’s use). (Nissan)
• The launch of the next generation Qashqai has reportedly been delayed until the middle of 2021. (FT)

PSA ^(history)

• Formed a joint venture with Total, owner of the Saft battery development brand, called Automotive Cells Company (ACC) that will produce batteries in France and Germany. The intention to form the joint venture was announced in January 2020 and the production sites are PSA powertrain plants. (Total)
• Unveiled a minor design for the Peugeot 3008 (PSA) and 5008. (PSA)

Renault ^(history)

• Announced a reorganisation led by new CEO de Meo. There will be four major divisions: Renault; Dacia; Alpine and New Mobility, with de Meo himself heading the Renault brand. He hopes that the changes will put an emphasis on profitability over volume. (Renault) As part of the move Renault has decided that the Alpine brand needs more, rather than less, attention and will become the constructor name for the Formula 1 team, whilst Renault will continue as engine supplier. Given the lack of success from similar expansion efforts for Alfa Romeo and Jaguar, it remains to be seen whether giving such a considerable marketing push to a marque with only a single vehicle will pay off. (Renault)

Tesla ^(history)

• Plans to raise $5 billion through issuing new stock. (Tesla)
• Despite its rocketing share price and recent improvements in financial performance, Tesla was not added to the USA’s S&P 500 stock index. (Reuters)
• Rumours swirled over a flying visit made by CEO Musk to VW’s headquarters. VW’s CEO sought to quash the more colourful theories by saying Musk had simply stopped by to test drive the ID3 all-electric compact car, and been slightly rude about its top speed. (LinkedIn)

VW Group ^(history)

• Porsche is looking for collaborators to develop synthetic “efuels” that have lower carbon emissions than fossil fuels, even offering to jointly build small scale factories to pioneer the technology. The brand also hopes that CO₂ regulators might credit brands with developing the products. (Porsche)
• Porsche is borrowing about 400 production workers from nearby Audi facilities to help meet demand for the all-electric Taycan. (Automobilwoche)
• The chairman of VW’s works council thinks that by 2023, when VW has several factories producing electric vehicles at full tilt, people will start talking about VW more than Tesla. He also expressed a lack of interest in a four day working week, reportedly under consideration by other German car makers (e.g. Opel), saying VW has plenty of work for its employees to do. (Manager Magazin)

Other

• Byton, which suspended operations in July, will reportedly raise about $300 million by forming a new company called Shengteng, and hopes to get mass production underway again soon. (Caixin)
• Daimler’s boss remains open minded about an expanded future cooperation with Aston Martin but says that he can’t comment on any initiatives at present. (Top Gear)
• Lotus is being sued by Williams Advanced Engineering because Lotus took electrical work on the forthcoming Evija inhouse. (Autocar)
• Gordon Murray announced a track focused version of the recently unveiled T.50 hypercar. The T.50s will cost over £3 million and only 25 will be built. (Gordon Murray)

News about other companies and trends

Economic / Political News

• The UK government decided that now is a good time to take a hard stance on Brexit, with the top negotiator saying how red the country’s red lines are and the prime minister expected to declare that he would be comfortable with trading with the EU on WTO terms. (BBC)
• US light vehicle SAAR of 15.2 million in August was down (11)% versus prior year but was the strongest industry level seen since February. (Wards)
• UK passenger car registrations in August of 87,226 units fell (5.8)% on a year-over-year basis, dampening hopes of an industry recovery glimmers of hope in July. (SMMT)
• German passenger car registrations of 251,044 units in August fell (20)% compared to prior year. (KBA)
• French passenger car sales in August of 103,631 units was a drop of (20)% versus August 2019. (CCFA)
• Spanish passenger car registrations of 66,925 units in August fell (10)% compared to prior year. (ANFAC)
• Italian passenger car sales in August were down only (0.4)% versus prior year, at 88,801 units. (UNRAE)

Suppliers

• Magna is buying Chongqing Hongli Zhixin (宏立至信) a seating supplier with which it has had a joint venture in China since 2015. (Magna)
• Valmet expects sales of battery packs to exceed revenue from contract manufacturing within five years. (Valmet)
• Bosch acquired 26% of swappable battery pack maker Sun Mobility. (Economic Times of India)
• Continental announced an expanded cost saving plan (the company originally announced a recovery plan in September 2019) with a target of saving €1 billion annually by 2023. About 30,000 jobs globally will be affected, but not all of them will go. (Continental)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber and Yandex’s Russian ride hailing joint venture is spinning off its self-driving division. Yandex will take the lion’s share of the autonomous business (73)%, with Uber retaining a 19% stake. (TechCrunch)

Driverless / Autonomy ^(history)

• Allegro MicroSystems acquired lidar developer Voxtel. (Allegro)
• Self-driving truck firm Ike says that Ryder, DHL and NFI have signed up to use Ike’s kit on 1,000 of their trucks, which the company hopes can replace drivers on highway trips. Rather than selling an entire vehicle, Ike will modify existing trucks and sell a subscription to its software and hardware. (Ike)
• Uber and Yandex’s Russian ride hailing joint venture is spinning off its self-driving division. Yandex will take the lion’s share of the autonomous business (73)%, with Uber retaining a 19% stake. (TechCrunch)

Electrification ^(history)

• Bosch remains convinced that, for heavy trucks, hydrogen fuel cells are a better bet than battery electric vehicles. The key reason is that the battery sizes necessary for long range add to vehicle weight, potentially at the cost of reduced payload. (Bosch)
• Battery developer QuantumScape will list via a merger with a special purpose vehicle. (Reuters)
• The UK’s automotive trade body, the SMMT, reckons that it will cost almost £17 billion to prepare the country’s infrastructure for mass adoption of electric vehicles by installing more chargers. (SMMT)

Other

• Japanese flying car start-up SkyDrive raised around $35 million. (Deal Street Asia)
• Volta showed off the prototype of the 16 tonne heavy truck it intends to produce from 2022 onwards. The design of the vehicle had already been shown in 2019 as a render. (Volta)

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Porsche pushes forward with new retail models; trying to understand the markets; and in-wheel motors getting their time in the spotlight. Please enjoy our auto industry and mobility briefing for 24^th August to 30^th August 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Take On Me — Whilst others are underwhelmed by the performance of their short term rental schemes  Porsche are pushing forward with a third expansion (albeit still relatively small). The offering is being expanded with a new tier that gives a discount if you don’t change cars. It’s easy to rationalise a list of exceptional reasons why Porsche’s brand can provide customers with something special that rivals can’t match, but is that true or can the results be matched with hard work?
• You Win Again — Daimler won an order from Amazon (check: tech customer) for a load of all-electric vans (check: emerging technology) that are going to be delivered this year (check: not vapourware). Yet markets didn’t swoon as they have for similar order numbers for smaller players. It makes sense in a way because the numbers are trifling in the context of Daimler’s business and the global industry, but the same argument could be made for any number of start-ups with orders for vehicles that aren’t yet available. So, what matters? Selling the future or simply not being one of the established brands?
• You Spin me Round — Mahindra agreed to work with electric motor maker REE on a new design for commercial vehicles that will properly leverage REE’s in-wheel motor technology. In-wheel motors promise a great deal for package, efficiency and control. There are only a handful of firms offering the units (let me know if you are wondering who the others are) and hopefully the move will make rivals consider whether they are taking the technology seriously enough. Could its time have come?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW ^(history)

• Cutting staff and shifts at the Mini plant in the UK. (BBC)

Daimler ^(history)

• Ineos and Daimler are reportedly close to agreeing the sale of the Hambach, France, factory. (Manager Magazin)
• Daimler announced that it was selling 1,800 all-electric vans to Amazon, but the share price didn’t jump by a bajillion dollars — even though it plans to deliver them this year. (Daimler)
• Estimates of Daimler’s headcount reductions continued to grow, and fluctuate. Some said 20,000 jobs would go. (Automotive News), whilst others said that, net of unfilled positions, the number was 30,000. (Manager Magazin)

FCA ^(history)

• Recalling around 186,000 pick-ups trucks because the floor mats could foul the pedals. (FCA)

Ford ^(history)

• Reportedly set to announce 1,000 job losses in North America as part of profit recovery efforts. (Bloomberg)
• Undertaking a trial of vehicles that can park themselves. Ford’s press release implies that the sensor set is the same that cars with the L2 driver assistance package will receive, plus some upgraded software that can interact with local infrastructure to safely find a parking space. (Ford)
• Recalling a small amount of vehicles because side impact airbags might not have been installed correctly. (Ford)

General Motors ^(history)

• The UAW union are up in arms because GM is using salaried staff to cover for hourly absenteeism (related to coronavirus) at the Wentzville, USA, plant. (Detroit Free Press)

Honda ^(history)

• Toyota and Honda are starting a joint research project called Moving e that will see a fuel cell bus used as a mobile generator, focused on disaster relief efforts. Toyota will provide the bus whilst Honda will contribute generator expertise. (Honda)
• Kicked off the (previously announced) formal processes for integrating Keihin, Showa and Nissin Kogyo into Hitachi, in which Honda will take a share. (Honda)

Hyundai / Kia ^(history)

• Hyundai’s Ioniq brand hopes to capture legions of teenage fans after enlisting the services of K-Pop sensations BTS to create a new brand song. (Hyundai)

PSA ^(history)

• Rumoured to be planning large land sales at Opel’s Rüsselsheim base to raise cash. (Wirtschaftswoche)
• Opel’s boss is open to a four day week if it helps to save jobs and is cheap. (Handelsblatt)

Tata (includes JLR) ^(history)

• Tata wants cashflow to increase enough to repay almost $6.5 billion of debt over the next three years. (Reuters)
• After Ford’s Bridgend engine factory closes, JLR will take over manufacturing of V8 engines (which it owns the development cycle and IP for) at the Wolverhampton plant, taking on equipment and staff from the Ford plant to do so. (Autocar)

Tesla ^(history)

• Hackers targeted Tesla’s Nevada Gigafactory but were thwarted by a double agent. (Reuters)

Toyota ^(history)

• Toyota and Honda are starting a joint research project called Moving e that will see a fuel cell bus used as a mobile generator, focused on disaster relief efforts. Toyota will provide the bus whilst Honda will contribute generator expertise. (Honda)

VW Group ^(history)

• Porsche has pushed back the launch timing for the all-electric Taycan Cross Turismo shooting brake model because demand for the saloon variant is so strong. (Autocar)
• Porsche unveiled a major refresh for the Panamera four door. (Porsche)
• Whilst others are ending their experiments with short term car leasing, Porsche is expanding further in North America, adding more cities and a new monthly offering that makes subscribers commit to a single car. (Porsche)
  • Significance: Porsche’s brand strength, and portfolio diversity, appear to position the company well for an offering that is similar to joining a car club but with greater convenience. It is unclear whether other brands have the same cachet required to promote themselves in this way.

Other

• Borgward has gone silent on plans for a full-scale European launch after underwhelming sales in the Chinese market and problems with at its parent. (Autocar)
• Ineos and Daimler are reportedly close to agreeing the sale of the Hambach, France, factory. (Manager Magazin)
• Electric hub motor maker REE and Mahindra will develop commercial vehicles together. (REE)
• The founder of electric truck maker Nikola is giving away part of his shareholding to loyal employees. (Nikola)
• Bollinger plans to make an all-electric commercial vehicle on the same platform as the SUV and pickup truck that have already been unveiled and a manufacturing partner will be announced soon. (Bollinger) The brand’s founder says the firm is in the process of raising investment, with the annual sales target remaining in the low four-digits, and that several special purpose entities had approached the company with a view to a listing as used by Fisker, Canoo, Luminar et al. (Reuters)
• Spyker is back, thanks to a partnership with racing outfit BR Engineering, and plans to put three models into production from 2021 onwards. Since two of them were unveiled in 2013 and 2016, it is unclear how positive the customer response will be. (Spyker)
• Workhorse is using Hitachi to provide financing and consultancy services. (Workhorse)
• Nio announced another share issue. (Nio)
• McLaren showed off the new carbon fibre chassis that will underpin its next generation models. (McLaren)
• Xpeng’s initial product offering went great guns and the firm is now worth over $10 billion. (Reuters)
• Chinese car maker Lifan agreed a restructuring plan with creditors. (China Daily)

News about other companies and trends

Suppliers

• Shiloh Industries agreed a deal to sell most of itself to an investment firm. (Shiloh)
• Hella is reportedly considering selling off its driver assistance unit. (Bloomberg)
• Honda kicked off the (previously announced) formal processes for integrating Keihin, Showa and Nissin Kogyo into Hitachi, in which Honda will take a share. (Honda)

Dealers

• Mexican used car website Kavak is merging with Argentina peer Checkars. (Reuters)
• OKXE.vn a Vietnamese website for selling motorbikes raised $5.5 million. (Deal Street Asia)
• CoPilot, an app that gives car buyers information on the best prices, raised $10 million. (Business Journals)

Ride-Hailing, Car Sharing & Rental ^(history)

• Lyft and Uber are reportedly preparing plans to licence their brands in California to fleet operators as a contingency measure, as the legality of their current practice of treating drivers as contractors rather than employees hangs in the balance. (New York Times)
• Ride hailing advertising firm Firefly is acquiring Strong Outdoor. (TechCrunch)

Driverless / Autonomy ^(history)

• Qualcomm and Veoneer will collaborate on an integrated self-driving hardware and software suite. (Veoneer)
• Uber’s self-driving car unit released an updated safety report. (Uber)
• Self-driving truck company Ike also released a new safety report. (Ike)

Electrification ^(history)

• Motiv Power raised $15 million. (Reuters)
• Mitsubishi has licenced Paice Hybrid’s technology. (Paice)
• Electric hub motor maker REE and Mahindra will develop commercial vehicles together. (REE)
• Toyota and Honda are starting a joint research project called Moving e that will see a fuel cell bus used as a mobile generator, focused on disaster relief efforts. Toyota will provide the bus whilst Honda will contribute generator expertise. (Honda)
  • Significance: Although the idea has clear application potential, it is less obvious how to transport all the hydrogen required to the disaster area.

Other

• Additive manufacturing company Desktop Metal is listing via a merger with a special purpose vehicle in a $2.5 billion deal. (Reuters)
• Bicycle rental firm Bolt (not the same as the ride hailing company) raised $11 million and changed its name to Zoomo. (FINSMES)

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Daimler: connecting people; learning to love battery swapping; and giving investors what they want. Please enjoy our auto industry and mobility briefing for 17^th August to 23^rd August 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• You Can’t Make Old Friends — Mercedes has connected 500,000 older cars by fitting adaptors to the vehicle’s OBD port. The scheme has been going for several years and there are plenty of similar aftermarket products, but Mercedes is pushing the idea far further than most rival OEMs. It isn’t clear why it is such an outlier. In a world where OEMs drool over the potential of mystical “big data”, why haven’t they taken the opportunity to (cheaply) glean more information from vehicles that are already on the road?
• Wind Of Change — Nio plans to offer a battery subscription service. It isn’t cheap (about $140 per month) but users get a hefty discount to the list price. More interestingly, it combines battery rental with battery swapping — the first real attempt since Project Better Place (which used smaller batteries). Even more interestingly, if the scheme works well in China, Nio will bring it to the West, giving European and American consumers a first taste of battery swapping. How will others react if the scheme takes off?
• Easy Lover — Rumours persist that GM might spin off its electric vehicle business to cash in on investor appetite for pure electric plays. The operational issues with splitting out a subset of a business which spans many brands makes my brain ache. But why try so hard? If Fisker — who plan to make an electric car using olde worlde VW’s electric vehicle platform — can raise loads of money by simply putting new sheet metal on top, why don’t GM just (1) resurrect Saturn, (2) make it electric-only, (3) sign a technology licencing agreement and (4) release it into the ether, pocketing a couple of billion dollars for their trouble? For that matter, why not Ford with Mercury and FCA with Plymouth?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Rolls-Royce claim that their initial attempts at reduce NVH in the cabin of the new Ghost were too successful and engineers had to add some noise back in to prevent the experience being too eery. (Rolls-Royce)

Daimler ^(history)

• Has now updated 500,000 older vehicles with retrofit adaptors that give limited connected features. (Daimler)
  • Significance: Although the modems are unable to offer read/write functionality, the user benefit and data gathering potential at a relatively low cost (c. $50 / unit) make the Mercedes Me scheme worthwhile.
• Rejected a proposal by German unions to move workers onto a four day week that would have protected jobs but harmed productivity. Unions remain open to fewer hours with a partial reduction in net pay. (Manager Magazin)
• The French government are reportedly suspicious about Ineos’s proposed takeover of the Hambach, France, factory and have commissioned consultants Roland Berger to review the plans. (Consultancy.eu)

FCA ^(history)

• Recalling around 132,000 cars because component position sensors in the engine might stop working properly and cause the engine to stall. (FCA)

Ferrari

• Signed a new agreement with F1 governing the commercial rights and revenues between 2021 – 2025. (Ferrari)

Geely (includes Volvo) ^(history)

• Kandi is exploring options for a North American plant. (Kandi)

General Motors ^(history)

• Said that 40% of forthcoming GM products for China will be electrified, and all will be locally built. GM is excited by the potential for complexity reduction (such as 500 ICE engine and transmission combinations down to 19 – although it isn’t clear if this spans the same portfolio size the directional saving is real). (GM)
• Appears committed to making owners pay for long term use of the “Super Cruise” driver assistance suite, but has yet to decide how much it will cost. Owners of older vehicles were granted an additional year of the technology at no cost to give executives breathing room. (Motor1)
• Further rumours that GM could spin off its electric car business rallied shares. (Bloomberg)
  • Significance: Given that GM has no specific all-electric brands, the rationale for, and operational execution of, a divestment remains unclear — apart from tapping into the market’s appetite for electrified vehicle assets. This week’s tech day where it was clearly demonstrated that electric vehicles underpin the medium-term business plan in China. A potential motivation could be to create a GM “good bank” of assets considered undervalued by the markets and leave a rump GM saddled with legacy technologies and obligations; pretty much a repeat of GM’s Chapter 11 bankruptcy…

Hyundai / Kia ^(history)

• Reportedly planning a new factory in Singapore to make electric vehicles. (Straits Times)

Tata (includes JLR) ^(history)

• JLR is looking at ways to include more recycled content in the aluminium used in car bodies, saying that production CO₂ emission savings of 26% are on offer if they succeed. (JLR)
• Despite recent moves by others, notably Daimler but not BMW, away from using the technology in passenger cars, JLR believes that hydrogen power has a “key place” in the portfolio. (Autocar)
• After last week denying that it was about to sell part of the passenger car division, Tata had to deny that it was looking to sell part of JLR. (Tata)

Toyota ^(history)

• Will use Amazon’s cloud computing services to run some of Toyota’s mobility services. (Toyota)

VW Group ^(history)

• Agreed to increase the pay of Mexican workers by 5.5%. (Reuters)
• Started production of the ID4 all-electric crossover. (VW)
• Porsche is reportedly reviewing past models for potential problems with engine emissions. (Reuters)

Other

• Indian start-up EVage hopes to launch an all-electric delivery van, and then move on to products as varied as a city car and SUV built from the same architecture. (Economic Times of India)
• Canoo plans to list via a merger with a special purpose vehicle that will see the firm valued at $2.4 billion. (Canoo)
• A US importer is reportedly on the verge of making a takeover offer for Mahindra’s Ssangyong. (Yonhap)
• Bollinger announced a new headquarters and plans to grow the organisation. (Bollinger)
• Electric commercial vehicle firm XOS Trucks (originally Thor) raised $20 million from investors including supplier Metalsa’s parent. (XOS)
• Nio plans to offer a battery leasing service, complete with battery swapping, enabling customers to reduce the upfront cost of their vehicle. (Nio) If the scheme is successful, Nio hopes to expand outside China. (AP)

News about other companies and trends

Suppliers

• UK tuning business Mountune appears to be up for sale. (Autocar)
• Valmet will start low volume contract manufacturing in Germany in 2021. (Valmet)
• US president Trump called for a boycott of Goodyear after the company said workers would not be allowed to wear baseball caps supporting his campaign (or any other, but that was beside the point). (MarketWatch)

Dealers

• Indian online used car marketplace CarDekho plans to open 1,000 physical sites by 2022. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental ^(history)

• A Californian court ruled that people driving for ride hailing services such as Uber and Lyft were employees rather than contractors. As a result, Uber and Lyft said they would suspend services in the state, but then backtracked after being told the ruling wouldn’t be immediately implemented and should be decided in a referendum instead. (Lyft)
• Multimodal travel start-up Omio raised $100 million. (TechCrunch)

Driverless / Autonomy ^(history)

• Lidar developer Luminar agreed to list via a merger with a special purpose vehicle that will have a market capitalisation of around $3.4 billion, and over $500 million in cash. (Luminar)
• Aurora’s boss shrugged off suggestions that the firm needs to have large OEMs signed up as partners, after seeing collaborations with several OEMs dissolve. He says the company has more than enough money and is confident that his team will do a better job than rivals of developing self-driving technologies. (FT)
• Former employees of Zoox are trying to sue the company, saying that it should have sold itself to GM’s Cruise unit, rather than Amazon who offered more money overall, but less for executives. (Reuters)
• Ibeo says its new lidar sensor has a 260m range and is ready for production in a ZF-owned plant. (Ibeo)
• GM appears committed to making owners pay for long term use of the “Super Cruise” driver assistance suite, but has yet to decide how much it will cost. Owners of older vehicles were granted an additional year of the technology at no cost to give executives breathing room. (Motor1)

Electrification ^(history)

• Nio plans to offer a battery leasing service, complete with battery swapping, enabling customers to reduce the upfront cost of their vehicle. (Nio) If the scheme is successful, Nio hopes to expand outside China. (AP)

Other

• The Williams F1 team has been sold to an investment firm. (The Guardian)

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Honda’s splendid isolation; putting fleet sales in context; and lithium companies playing hardball. Please enjoy our auto industry and mobility briefing for 3^rd August to 16^th August 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Don’t Marry Her — The Japanese government reportedly tried to matchmake Nissan and Honda, only for the latter to swiftly rebuff the idea. They shouldn’t have been surprised, Honda’s approach to M&A ever since missing out on Rover in the 1990’s has been splendid isolation. Did officials think there was something enticing about the prospect that Honda are missing? Why not simply let Toyota step in, as they have done for practically all Japanese marques, Honda, Nissan and Mitsubishi aside?
• Drop It Like It’s Hot — There was a lot of excitement about Nikola sealing a deal for 2,500 refuse lorries. It isn’t to be sniffed at, but a single contract hardly confirms the company as the future. Piaggio announced a deal to sell 5,000 scooters to the Italian post office but no one seemed to be raving about that. What are the chances investors are suffering from confirmation bias when it comes to companies touting new powertrain technologies?
• Make You Mine — The CEO of lithium mining company Livent says car makers are being too stingy and he won’t invest in capacity at the low prices they are willing to pay, so they won’t have enough raw materials to make all the cars they want in the next few years. The thing is, batteries are still too expensive for mainstream consumers. Everyone assumes electric vehicle mix is going to rise rapidly, but that is driven by a commonly-held assumption that battery prices will drop low enough to make them affordable. Could higher lithium prices spur more innovative thinking about reducing average battery sizes including (gasp) battery swapping?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• Reported Q2 2020 revenue of €20 billion, down (22)% versus prior year and an EBIT loss of €(666) million compared to a €2.2 billion profit in Q2 2019. BMW tried to stay positive by expressing confidence in complying with 2020 CO₂ regulations in Europe and sees the full year automotive EBIT margin between 0% – 3%. (BMW)
• The Free Now ride hailing joint venture between BMW and Daimler is profitable in major European markets, including the UK, according to the boss of UK operations. (Business Insider)

Daimler ^(history)

• Says that online tools for customers are going great guns, with increased use of chatbots and 98% of Chinese customers completing their finance contracts via the internet rather than in person. (Daimler)
• Gave an overview of the MO360 software system that Daimler uses to link its factories. Mainly Daimler simply stated the obvious about how different elements of the factory are linked but they also revealed that each factory can saves 10 tonnes of paper per year by going paperless. (Daimler)
• Settled claims covering diesel emissions in 250,000 US vehicles in a class action lawsuit and agreed the level of fines it must pay the authorities. The total bill will be around $3 billion ($2.2 billion in fines and compensation plus an undetermined amount to ensure compliance). (Daimler)
• Mercedes and CATL will collaborate on new battery technology. Mercedes is calling its approach to future vehicles “electric first”, perhaps inspired by the 2018 E-FIRST (electric first) paper written by Evercore ISI and Ad Punctum, which first coined the phrase? (Daimler)
• The Free Now ride hailing joint venture between BMW and Daimler is profitable in major European markets, including the UK, according to the boss of UK operations. (Business Insider)

FCA ^(history)

• Contemplating a recall of 1 million SUVs with engines that have excessive tailpipe emissions. (Detroit Free Press)

Ferrari

• Ferrari reported Q2 2020 sales of 1,389 cars, down (48)% on a year-over-year basis. Revenue of $571 million fell (42)% whilst adjusted EBIT of $23 million fell (90)% versus 2019. The company assumes revenue and adjusted EBIT in the full year will be at the bottom end of expectations. (Ferrari)

Ford ^(history)

• Announced the retirement of CEO Hackett and widely predicted promotion of COO Farley. The changes are effective 1^st October but Hackett will remain on the payroll until 2021. (Ford) External reception to Farley’s appointment was mixed. Whilst some media reported glowing praise from peers and industry experts, others – claiming to represent the views of company insiders – saw the move as a mistake.
• Put a sales stop on PHEV Kugas and told owners who have taken delivery of cars not to charge them. (Autocar)
• Recalling 558,000 Edge and MKX SUVs because the brake hoses could leak. (Detroit News)
• Gave a presentation to investors about opportunities in the European business, where the prepared materials focused almost entirely on improving the commercial vehicle unit. During the introduction, the head of IR was at pains to recognise the presence of Henry Ford III (a member of her team), despite him having no active role in the presentation. In the Q&A, the regional CEO said the Kuga PHEV makes up 50% of the vehicle’s sales. He declined to say that electric vehicles would be profitable, even from the product shared with VW, instead preferring to commit to profitability from the overall business during the transition phase. The profit goal remains 6% margin with a commitment to reach the target even with lower volumes. (Ford)
• Ford now claims over 165,000 orders for the Bronco. (Ford)

Geely (includes Volvo) ^(history)

• Geely’s first half 2020 revenue was 36.8 billion RMB (about $5.3 billion), down (23)% on a year-over-year basis. The net profit was 2.3 billion RMB (about $330 million), down (43)%. (Geely)
• Geely unveiled the Preface, a sedan that sits on the same platform used for Volvo’s XC40. (Geely)
• Sharing the CMA platform with Geely and Lynk&Co has helped Volvo double the purchasing scale compared with building the vehicle alone (with manufacturing in different regions, some parts will be dual sourced). (Volvo)
• Kandi Technologies reported Q2 2020 revenue of $19 million and net income of $4 million. (Kandi)

General Motors ^(history)

• CFO Suryadevara left to work in the finance industry. An interim CFO was appointed, (John Stapleton, the regional finance chief for North America) whilst the company searches for a successor. (GM)
• Has almost fulfilled the ventilator manufacturing contract imposed on the company by the US government, although Ventec, GM’s partner, will continue to make them at GM’s factory. (Detroit Free Press)
• Unveiled the Cadillac Lyriq, the brand’s first all-electric car. (GM)

Honda ^(history)

• Reported Q2 2020 (Honda’s fiscal Q1) revenue of 2.1 trillion JPY (about $20 billion), down (47)% on a year-over-year basis. The operating loss was (114) billion (about $1 billion), down from a profit of around $2 billion in the prior year. Although motorcycles and financial services were profitable and other businesses were near breakeven, the automotive arm lost 195 billion JPY (about $1.8 billion). In the full year, Honda hopes to make a profit of around 200 billion JPY (about $1.8 billion). (Honda)
• The Japanese government reportedly tried to matchmake Honda and Nissan, but Honda rejected the approach. (FT)
• Recalling 1.6 million US vehicles to fix several problems including faulty sensor readouts on the instrument panel; rear cameras that don’t turn on or suffer water damage; and sliding doors that won’t close properly when it gets too cold. (Detroit News)

Hyundai / Kia ^(history)

• Aptiv and Hyundai-Kia’s autonomous technology joint venture will be called Motional. (Motional)
• Kia unveiled the Sonet, a small value crossover that will be produced in India and exported globally. (Kia)
• Kia showed off the facelifted Stinger. (Kia)
• Hyundai will use “Ioniq”, hitherto a vehicle name, as a sub-brand for all-electric cars. The first two models, Ioniq 5 and Ioniq 6, will based off the 45 and Prophecy concept cars respectively. (Hyundai)

Nissan and Mitsubishi ^(history)

• Carlos Ghosn says he will release a tell-all book at the end of the year. (Car Advice)
• The Japanese government reportedly tried to matchmake Honda and Nissan, but Honda rejected the approach. (FT)
• The chairman of Mitsubishi Motors is stepping down. (Nikkei)
• Granted workers at the Barcelona, Spain factory cluster a temporary reprieve. The plant will now close at the end of 2021, one year later than planned. (Nissan)

PSA ^(history)

• The head of the Free2Move mobility unit said that external investment might be welcomed in future, but at present the focus is on getting the organisation running properly. (Reuters)

Subaru

• Reported Q2 2020 financial results (fiscal year Q1). Revenue of 457 billion JPY (about $4.3 billion) fell (45)%, driven by volume halving from the previous year. An operating loss of 16 billion JPY (about $150 million) compared to a healthy profit in Q2 2019. (Subaru) The firm has now provided full year guidance, expecting full year revenue of 2.9 trillion JPY (about $27.5 billion) and operating profit of 80 billion JPY (about $760 million). (Subaru)

Tata (includes JLR) ^(history)

• Jaguar’s classic department is making (via restoration) a special edition E-Type that matches the original 1966 Geneva Motor Show cars. Taking a leaf out of Aston Martin’s book, you can only buy a double pack of a coupe and a convertible. (JLR)
• Tata Motors denied that it was looking to offload 49% of the passenger car business saying that although the unit had been structured in a way to allow external investment, no immediate changes are on the horizon. (Tata)

Tesla ^(history)

• A German case where a driver changing the windscreen wiper settings using the central screen was penalised under the rules designed for using mobile phones whilst driving received broad attention. Although the menu complexity was cited as an issue, the court put the onus on the driver to only adjust settings when it was safe to do so. (BBC)
• Started offering an in-house wrapping service at Chinese dealerships. (Electrek)
• Announced a 5:1 stock split, the main benefit of which is lowering the stock price for a single share for retail investors. (TechCrunch)
• CEO Musk said that if it turns out people don’t like the real life Cybertruck, Tesla can just build a more conventional looking one on the same running gear. (Business Insider)

Toyota ^(history)

• Reported Q2 2020 (Toyota’s fiscal Q1) revenue of 4.6 trillion JPY (about $43.5 billion), down (40)% on a year-over-year basis. Operating income of 13.9 billion JPY (about $130 million) as losses in North America and Europe were just offset by profitability in Japan and Asia. The full year forecast is revenue of 24 trillion JPY (about $227 billion) and operating income of 500 billion JPY (about $4.7 billion) from sales of 9.1 million vehicles, (13)% lower than 2019/20. (Toyota)

VW Group ^(history)

• Porsche SE invested in connected car software firm Aurora Labs. (Porsche SE)
• An employee reportedly at the centre of an investigation into spying on VW purchasing negotiations was found dead in suspicious circumstances. (Manager Magazin)
• Porsche is reportedly planning a new plant in Slovakia to create car bodies. (Reuters)

Other

• Gordon Murray took the covers off the T50 hypercar. (Gordon Murray)
• Hyperion unveiled the XP1, a hydrogen powered supercar with a 2.2 second 0 – 60 mph time, that the firm hopes to have in production by 2022. (Hyperion)
• Nio reported Q2 2020 sales of 10,331 cars, the company’s best ever quarter. Revenues of 3.5 billion RMB (about $500 million) rose 147% on a year-over-year basis. However the company continued to make an operating loss, of (1.16) billion RMB (about $164 million). (Nio)
• XPeng filed documents for an IPO. (SEC)
• Ineos said that although it hasn’t finalised a deal to take over Daimler’s Hambach, France, plant, it is no longer planning to create new factories in Wales and Portugal to build the Grenadier. (Business Live) Jaguar Land Rover lost a court case to stop production of the Grenadier on the basis it was too similar to the Defender. (Car and Driver)
• Fisker says that Magna will build the company’s forthcoming Ocean SUV. (Reuters)
• Lucid’s CEO says he won’t share the firm’s technology with any other business. (Green Car Reports)
• One of Faraday Future’s early prototypes will go to auction. (TechCrunch)
• Nikola reported a Q2 2020 loss of $(87) million. The company isn’t yet making any revenue. (Nikola) The company confirmed that it was interested in sharing technology with Hyundai, but the South Korean company was yet to reciprocate. (Reuters) Investors were massively cheered by an order for 2,500 refuse lorries. (Reuters)
  • Significance: Investor interest in individual orders seems unpredictable. Whilst Nikola’s order for rubbish trucks was applauded, no one seemed to care that Piaggio won a contract for 5,000 scooters from the Italian post office. What do these numbers prove?
• Mullen Technologies will list via a merger with special purpose vehicle Net Element. (Net Element)
• Workhorse reported Q2 2020 financial results. Revenue was $92,000 and the net loss was $(131) million, mainly blamed on non-cash interest costs. The company hopes that the merger of Lordstown and DiamondPeak will value its 10% Lordstown stake at $160 million. (Workhorse)
• Faraday Future plan to offer a version of the FF91 all-electric car with a spa mode that features lie flat seats and a massive screen that flips down from the ceiling. (Faraday Future)
• Online sleuths reckon there are about 30,000 orders for Rivian’s debut pickup truck. (Inside EVs)
• Electromobility Poland revealed the two all-electric cars it plans to build under the Izera brand. (Izera)

News about other companies and trends

Economic / Political News

• US light vehicle SAAR in July of 14.52 million units was (14)% lower than prior year. (Wards)
• German passenger car registrations in July of 314,938 units fell (5.4)% versus prior year. (KBA)
• French passenger car registrations of 178,982 units in July rose 3.9% versus 2019, with fewer selling days. (CCFA)
• Passenger car registrations in Spain during July of 117,929 units rose 1.1% versus 2019. (ANFAC)
• July saw 136,455 passenger cars registered in Italy, down (11)% on July 2019. (UNRAE)
• July UK passenger car registrations of 174,887 grew 11.3% versus July 2019. (SMMT)

Suppliers

• Continental reported Q2 2020 revenue of €6.6 billion and EBIT of €(829) million. (Continental) Continental formed a joint venture for fluid connectors with smaller specialist firm aft Automotive. (Continental)
• Veoneer completed the sale of its US brakes business to ZF. (Veoneer)
• Adient reported Q2 2020 revenue of $1.6 billion and EBIT of $(269) million. (Adient)
• BorgWarner reported Q2 2020 revenue of $1.4 billion and an operating loss of $(78) million. (BorgWarner)
• Delphi (soon to merge with BorgWarner) reported Q2 2020 revenue of $628 million and an operating loss of $(60) million. (Delphi)
• Bridgestone’s Q2 2020 revenue was 603 billion JPY (about $5.7 billion) and adjusted operating loss was (1.5) billion JPY (about $15 million). (Bridgestone)
• Lear reported Q2 2020 revenue of $2.4 billion and a net loss of $(294) million. (Lear)
• Kongsberg reported Q2 2020 revenue of €154 million and adjusted EBIT of €(33) million. (Kongsberg)
• Allison Transmission reported Q2 2020 sales of $377 million and net income of $23 million. (Allison)
• Grammer’s Q2 2020 revenue was €281 million, EBIT was €(22) million. (Grammer)
• Martinrea reported Q2 2020 revenue of $461 million and a net loss of $(147) million. Despite the loss the company plans to pay a dividend. (Martinrea)
• China Automotive Systems reported Q2 2020 sales of $83 million and an operating loss of $(5) million. (CAAS)
• Schaeffler reported Q2 2020 revenue of €2.3 billion and EBIT of €(150) million. (Schaeffler)
• Magna reported Q2 2020 revenue of $4.3 billion and an operating loss of $(789) million. The company will still pay a dividend. (Magna)

Dealers

• Used car marketplace Spinny acquired Truebil. (Deal Street Asia)
• Used car marketplace Carro raised an additional $11 million. (Deal Street Asia)
• CarParts.com hopes to raised $52 million through a rights issue. (CarParts.com)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber reported Q2 2020 revenues of $2.2 billion, a (29)% drop on a year-over-year basis. As revenues from ride hailing dropped (67)%, delivery rose 103%, and at $1.2 billion accounted for more than half of the company’s revenues, overtaking ride hailing for the first time. The company’s preferred adjusted EBITDA was a loss of $(837) million. (Uber)
• Lyft reported Q2 2020 revenue of $339 million, down (61)% versus prior year reflecting a (60)% drop in active riders. The net loss was $(437) million. (Lyft)
• Uber acquired taxi software maker Autocab. The plan is to use Autocab’s platform to get taxi companies to bid on trips for Uber customers, in markets where Uber isn’t active. (Autocab)
• Grab reportedly raised $200 million. (Bloomberg)
• Ride hailing service TADA’s owner raised $5 million. (Deal Street Asia)
• Specialist ride hailing insurance start-up Buckle raised $31 million. (Buckle)
• Hertz’s revenues fell (70)% in Q2 2020 versus prior year, even as the US fleet size remained steady. (Hertz)
• The Free Now ride hailing joint venture between BMW and Daimler is profitable in major European markets, including the UK, according to the boss of UK operations. (Business Insider)

Driverless / Autonomy ^(history)

• Anthony Levandowski, the engineer at the centre of an intellectual property theft case that Uber lost to Google, was sentenced to 18 months in prison. The judge said he wanted to make an example of him. (BBC)
• Michigan plans to create a 40 mile stretch of road with a lane dedicated to self-driving vehicles. (Detroit Free Press)
• Aptiv and Hyundai-Kia’s autonomous technology joint venture will be called Motional. (Motional)

Electrification ^(history)

• Electric charging operator ChargePoint raised $127 million. (TechCrunch)
• The CEO of lithium supplier Livent called for automakers to offer lucrative longer term contracts to encourage investment in mining capacity. Although he called hopes for lower prices when capacity investments are required “voodoo economics”, he didn’t offer an opinion on the effect of higher prices on demand. (Reuters)
• Battery materials developer Coreshell Technologies raised $4 million. (Reuters)

Other

• Electric scooter manufacturer Veo started fitting indicators to its products. (Veo)
• Cocoa Motors launched a four wheeled balance board that the firm calls a “car in a bag”. (Cocoa Motors)

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Big order numbers for Bronco; in search of working capital; and the French love E-FIRST. Please enjoy our auto industry and mobility briefing for 27^th July to 2^nd August 2020. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Mr. Writer — 150,000 customers have placed orders for the new Ford Bronco. Hooray! This is the first time we’ve seen anyone quickly rack up a serious six digit pre-order number that merits mention in the same sentence as Tesla Model 3 or Cybertruck. But is talking about it off the cuff in an earnings call, as opposed to social media manipulation, the right way to build buzz?
• Shout — Workhorse published their IPO prospectus this week. The firm hopes to raise $675 million to move its truck from the prototype stage into production. Slide 23 illustrates some of the problems in the maths for start-ups… even though the company plans to build lots of expensive trucks, there isn’t anything in there for working capital — potentially a three digit million sum for the initial inventory — although there is a healthy “contingency” pot. Is this an oversight or have they invented a way to get negative working capital?  
• This Is What You Came For — After 2025, PSA says fully electric is the way forward. They showed off a new midsize car platform they’ve designed to have a big battery in the middle. If you don’t want (or can’t afford) a fully electric model, you can fit a hybrid in the front and reduce the battery size. It all sounds very like the E-FIRST proposal Ad Punctum and Evercore ISI made in late 2018: put the compromise on the internal combustion engine, not the electric bit. Coming in the same week as Renault’s new CEO sang the praises of the E-Tech motor-as-generator cars he has been driving, should other brands revisit their architectures?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW ^(history)

• BMW iVentures invested in connected technology company GenXComm. (BMW)

Daimler ^(history)

• When the Citan’s successor launches in 2022, there will be a more carlike version called T-Class. (Daimler)
• Agreed a series of cost saving measures with German unions. Most employees will work two hours less per week, without sacrificing any pay and bonuses will be either dropped or converted into time off. Union officials conceded that redundancies had not be avoided, but that packages would be voluntary. (Daimler)

FCA ^(history)

• Reported Q2 2020 revenue of €11.7 billion, down (56)% versus prior year. Adjusted EBIT of €(928) million fell from a €1.5 billion profit in the prior year. Analysts were impressed that the North American unit made a small profit despite a (62)% drop in shipments. (FCA)
• CEO Manley said that the trend for OEMs to progressively outsource component manufacture was “dangerous” and he expects competitors to get more involved in battery manufacture than they are today. (Seeking Alpha)
• CEO Manley believes that GM and Ford have been too quick to develop all-electric pickup trucks but implied that the Ram brand will be able to quickly react if the forthcoming GM and Ford trucks are a hit. (Detroit News)

Ford ^(history)

• Ford’s Q2 revenue of $19.4 billion, (50)% down on 2019, and adjusted EBIT loss of $(1.9) billion cheered investors who had been primed to expect a loss of closer to $(5) billion. Ford is now forecasting a full year loss, because of continued weakness and the cost of launching F-150. Whilst the all-electric Mustang Mach-E will launch this year, shipments won’t be significant enough to move the needle on revenue or profit. (Ford)
• 150,000 customers have put down refundable $100 deposits for Ford Broncos. (Ford – Earnings transcript p4)
  • Significance: Bronco’s reservation numbers are the first to hold a candle to Tesla (admittedly the Model 3 heyday had a $1,000 tag, so there could be some price elasticity). The financial value of the deposits matters far less than the ethereal buzz such numbers attract.
• Ford says that using legged robots, rather than static laser scanners, to survey a plant takes about half the time. There is also a potential to use airborne drones which are already used for mapping outdoors. (Ford)
• Will commence fully online sales in the UK later this year, although the level of involvement from a human dealer in completing the transactions remains unclear. Ford’s top UK salesman admitted that the move could lead to job losses in dealerships. (Auto Express)

General Motors ^(history)

• Reported Q2 2020 revenue of $16.8 billion, down (53)% versus prior year, and a $(536) million loss (on an adjusted basis). GM lost $(101) million in North America and continued to splash out on autonomous vehicles, albeit lopping almost one third of 2019’s spending level. GM was happy to talk about a scenario where profit recovered in the second half, but stressed that this was not the same as guidance. (GM)
• CEO Barra refuses to rule out anything that might increase shareholder value — including renaming the company or spinning off the electric vehicle unit. (Seeking Alpha)
  • Significance: Talking about spin-offs in concept is all very well, but GM’s portfolio is defined by brand, no powertrain choice. How would an exercise to spin off electric vehicles be organised when there is no electric-only brand?
• Partnering with the EVGo network in the USA (Nissan’s partner) to offer widespread fast charging. (GM)
• Although the unveiling of the all-electric GMC Hummer truck has been delayed (from May), the start of production still seems to be on track for late 2021. (GM)

Hyundai / Kia ^(history)

• Wants to take over the former GM site in St Petersburg, Russia. (Business Korea)

Mazda

• Reported Q2 2020 sales of 244,148 cars, down (31)% on prior year. (Mazda)
• In Q2 2020 (fiscal Q1), Mazda’s revenue of 377 billion JPY (about $3.6 billion), down (56)% on a year-over-year basis. The operating loss was (45) billion JPY (about $(430) million) — but this excluded the full impact of the factory shutdowns, which Mazda classed as a special item. By the end of the fiscal year (March 2021), Mazda expects sales to have recovered such that the year over year drop is only (8)%, with improvements in China partially offsetting a (14)% drop in other regions. The company expects to about breakeven in the next three quarters. (Mazda)

Nissan and Mitsubishi ^(history)

• Nissan’s Q2 2020 (fiscal Q1) sales of 1.17 trillion JPY (about $11.1 billion) fell (51)% versus prior year. Operating income of (154) billion JPY (about $(1.5) billion) fell from a modest profit in Q2 2010, and excluded the cost of coronavirus shutdowns. In the full fiscal year (to March 2021), Nissan expects volumes to be (16)% lower than in the prior year, with the proviso that no second wave is assumed. (Nissan)
• Reckons that 500km is the minimum range for a large all-electric vehicle. (Autocar)
• Piloting a scheme for users to pay for parking by plugging in their electric cars and allowing to be discharged. (Nissan)
  • Significance: Paying for parking via allowing power to be drawn from the battery could be a successful entry route for broader vehicle to grid (V2G) schemes.
• Mitsubishi produced 106,820 vehicles in Q2 2020, a drop of (66)% from prior year. (Mitsubishi)
• Nissan and Mitsubishi are considering building an all-electric kei car together, which would leave Suzuki (Nissan’s historic partner) in the lurch. (Mitsubishi)

PSA ^(history)

• Reported first half revenue of €25.1 billion, a drop of (34)% versus prior year. Operating income of €482 million fell (81)%. The firm made €820 million of cost reductions versus 2019 1^st half. (PSA)
• Announced that it has been working on an electrified platform, called eVMP, that focuses on packing as much battery into the centre of the cabin as possible. The platform is totally optimised for electric vehicles, but will be flexible for hybrid versions too. (PSA)
• Opel has given up its national sales company and turned to an importer model in Romania. (Opel)
• Faurecia reported first half 2020 revenue of €6.2 billion, down (31)% on a year over year basis and an operating loss of €(114) million, down from a €645 million profit in the prior year. (Faurecia)
• Separating the Free2Move mobility organisation so that, whilst it remains 100% owned by PSA, decisions can be made without reference to what the car business needs. (PSA)

Renault ^(history)

• Renault reported first half revenue pf €18.4 billion, down (34)% from prior year. An EBIT loss of €(2) billion fell from a €1.5 billion profit in the prior year. (Renault)
• Renault’s new CEO says that in the four weeks he has been on board the company has taken as many product decisions as in the preceding two years. He believes that the Renault brand needs to become less reliant of smaller city cars and move into the C or C+ segment (an area where Renault has ceded ground in recent years). He implied a product onslaught around 2023 / 2024 would improve things. He also believes that Renault’s E-Tech hybrid (a motor as generator set up without a conventional gearbox) is the right way for hybrids in Europe. (Seeking Alpha)

Subaru

• Produced 92,927 cars in Q2 2020, a drop of (65)% from the prior year. (Subaru)

Suzuki

• Reported Q2 2020 (fiscal Q1) sales of 425 billion JPY (about $4 billion), down (53)% on a year-over-year basis. Operating income of 1.3 billion JPY (about $12 million) fell (98)%. The company refused to give full year guidance, citing the continued spread of coronavirus in India. (Suzuki)

Tata (includes JLR) ^(history)

• Reported Q2 2020 (fiscal Q1) revenue of 31,983 Cr INR (about $4.3 billion), down (48)% on a year-over-year basis. JLR’s revenue (included in the prior number was £2.9 billion, down (44)% YoY. There was a before tax loss of (6,184) Cr INR (about $(820) million), of which £(413) million was attributable to JLR. (Tata)  
• JLR’s new CEO is ex-Renault boss Thierry Bolloré. He will start in September. (JLR)

Toyota ^(history)

• Sold 1.85 million vehicles in Q2 2020, down (31)% on the prior year. Sales in China were up versus 2019. (Toyota)
• Toyota’s automated driving unit will split into two divisions. One will concentrate on self-driving vehicles whilst the other will work on infrastructure technologies and business models that extend beyond making and selling vehicles. Both will be branded as “Woven City”. (Toyota)
• Taking a stake in electric drive maker BluE Nexus (a joint venture between Denso and Aisin Seiki). (Toyota)

VW Group ^(history)

• VW Group’s Q2 2020 revenue was €41.1 billion, a fall of (37)% versus prior year. Operating profit was €(2.4) billion, down from over €5 billion in 2019. VW blamed the entire drop on volume and mix, exchange and poor performance in the non-car making arms. The firm still aims to be profitable in the full year and pay a dividend in 2020, albeit less than was originally planned. (VW)

Other

• Aston Martin Q2 2020 revenue of £67 million, dropped (68)% on a year-over-year basis. The operating loss of £(83) million fell from a £(36) million loss in the prior year. The firm disclosed a restatement to prior year financials that reduced 2019 EBIT.  Aston Martin said revenues were in down partly because of de-stocking – dealer inventory now sits at about three months of sales. Although the DBX is in production, the sportscar factory won’t restart until the end of August. (Aston Martin)
• McLaren is now financially secure, according to the F1 team’s boss. (Motorsport.com)
• Chinese all-electric vehicle company XPeng has reportedly raised $300 million, on top of the $500 million the firm recently announced. (CNBC)
• Fisker didn’t finalise a deal to use VW’s MEB platform by the end of July as planned but the firm remains upbeat, hoping that an agreement will be reached by September. Fisker believes it has credible back-up options should the talks with VW fail. (Reuters)
• Lucid’s self-driving suite will be branded DreamDrive. The company says that the hardware (including lidar) will be capable of SAE L3 driving, and over time the software will be too. (Lucid)
• Lordstown plans to list via a merger with a special purpose vehicle called DiamondPeak. (Lordstown)
  • Significance: Lordstown’s plan calls for $675 million to get the vehicle into production and achieve a cash flow positive condition. $320 million of this is reserved for unforeseen contingencies. Missing from the plan appears to be working capital, which could easily reach three digits if sales aren’t immediate.

News about other companies and trends

Economic / Political News

• European manufacturers association ACEA published a new data book. (ACEA)

Suppliers

• ZF is merging its electric powertrain division with the unit that makes traditional drivetrains and says it will no longer develop parts for vehicles that exclusively use internal combustion engines. (ZF)
• Toyoda Gosei will offer in-car wireless charging using technology supplied by Ossia. The companies claim that devices can be charged even if they are several feet from the power source. (Toyoda Gosei)
• Faurecia is buying into a seating joint venture with BAIC by taking over the DAS Group’s stake. (Faurecia)
• Alfa is divesting its stake in Nemak, which will become separately listed. (Alfa)
• Dana reported Q2 2020 revenue of $1.1 billion (down (53)% YoY) and a net loss of $(173) million. (Dana)
• Aptiv reported Q2 2020 revenue of $2 billion (down (46)% YoY) and a net loss of $(369) million. (Aptiv)
• American Axle’s Q2 2020 sales were $515 million (down (70)% YoY), with a net loss of $(213) million. (AAM)
• Visteon reported Q2 2020 sales of $371 million (down (48)% YoY), with a net loss of $(45) million. (Visteon)
• Meritor reported Q2 2020 sales of $514 million (down (56)% YoY) and a net loss of $(36) million. (Meritor)
• Goodyear reported Q2 2020 sales of $2.1 billion (down (41)% YoY) and a net loss of $(696) million. (Goodyear)
• Michelin saw a (33)% drop in tyre shipments during Q2 2020. 1^st half light vehicle revenues fell (24)% compared to prior year. Light vehicle revenue of €4.4 billion and operating income was €(35) million. (Michelin)
• Stoneridge’s Q2 2020 sales were $100 million (down (55)% YoY) and a net loss of $(22) million. (Stoneridge)
• Faurecia reported first half 2020 revenue of €6.2 billion, down (31)% on a year over year basis and an operating loss of €(114) million, down from a €645 million profit in the prior year. (Faurecia)
• Continental claims to have the most powerful supercomputer in the automotive industry. (Continental)

Dealers

• Online used car seller Auto1 raised €255 million. (Reuters)
• Classifieds company Auto Trader acquired AutoConvert, which helps dealers offer financing. (Motor Trader)

Driverless / Autonomy ^(history)

• Toyota’s automated driving unit will split into two divisions. One will concentrate on self-driving vehicles whilst the other will work on infrastructure technologies and business models that extend beyond making and selling vehicles. Both will be branded as “Woven City”. (Toyota)

Electrification ^(history)

• Nissan is piloting a scheme for users to pay for parking by plugging in their electric cars and allowing to be discharged. (Nissan)

Connectivity

• Cybersecurity firm Cybellum raised $12 million. (Cybellum)

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